New Jersey Non-Compete Agreements and Employee Duty of Loyalty Examined by Appellate Division
New Jersey law imposes certain requirements on the behavior of employees, whether through the common law or contract. New Jersey employment law and business law will enforce restrictive covenants, including non-compete agreements, if they meet certain requirements. However, the tests for enforceability are different for restrictive covenants contained in employment agreements and those which are part of the sale of a business. Likewise, whether or not there are restrictive covenants, New Jersey employment law imposes on employees a duty of loyalty to their employers. The Appellate Division recently examined these requirements.
Robert Ryerson was a registered investment advisor (RIA), providing financial planning and investment services until the National Association of Securities Dealers (NASD) found him guilty of misconduct in 2006 by sharing commissions with non-NASD members and intentionally misleading his employer. Ryerson owned and operated NCP, a small financial advisory firm. However, the NASD’s revocation of his license meant he could no longer operate NCP.