The existence of a valid contractual relationship or a business expectancy.Defendant argues that this claim should be dismissed. Plaintiff’s complaint also alleged that Defendant tortuously interfered with the contract between Plaintiff and Defendant by accepting confidential information from Defendant. The Law in New Jersey on Tortious Interference with Contracts Plaintiff did not tailor the Agreement in a way that explicitly protected information related to its customers or pricing, but instead drafted it to cover “all information provided by either party (to the other).” Therefore, the court found that the Agreement was not reasonably drawn, as it not only bars Defendant from disclosing any trade secrets learned during his employment, but also prevents him from disclosing any information, including his experience and knowledge gained during that time. However, any covenant utilized to prevent appropriation of customers must be reasonably drawn, so as to not constitute an unreasonable restraint on trade. To be sure, an employer has a legitimate desire in seeing that a former employee does not appropriate its customers. “If a covenant prohibits a person from engaging in activities which are unnecessary to protect the promise, the covenant is unreasonable.” “The test of reasonableness of contracts in restraint to trade is that the restraint imposed upon one party must not be greater than is reasonable necessary for the protection of the other and not so great as to injure a public interest.” A reasonable time limit must be imposedĪll three of these factors must be present to create a valid non-compete agreement, as the law will not enforce a contract that serves merely to prohibit ordinary competition.The geographical restriction must not be overly broad.There must be a valid interest to protect.“In order for a non-compete agreement to be valid, three requirements must be met: The party challenging the validity of a covenant bears the burden to show that the covenant is unreasonable and contrary to public policy. Courts use the same test to determine whether confidentially agreements and non-compete agreements are enforceable. An obligation on the part of the defendantĬase law is not particularly well developed regarding how courts should determine whether a confidentially agreement is enforceable.The existence of a valid and enforceable contract.The Following is a Discussion by the Court of the Legal Claims Made by Both Parties Breach of Contract and Confidentiality AgreementĪ valid breach-of-contract claim requires the assertion of: Defendants also argued that Plaintiff’s claim was premised on the existence of a valid underlying contract, of which there was none. Plaintiff alleged that Defendant obtained a maintenance agreement with a customer because of Defendant’s “disclosure of pricing, and other proprietary information as precluded by the (Agreement.)”Īs a result Plaintiff sued for breach of contract, tortious interference with a contract, and conversion.ĭefendants argued that the Agreement is an unreasonable and unlawful restraint of trade and, as such, is unenforceable. The Agreement stated that Defendant’s confidentially obligations survive the termination of employment and shall have no time limit, except as otherwise provided for in the Agreement, however the Agreement did not set out any time or geographical limitations.ĭefendant left his employment with Plaintiff and began employment elsewhere. The Agreement gives examples of such covered information including, “but is not limited to (Plaintiff’s) concepts, drawings, designs, and other related proprietary information.” Under the Agreement, Defendant agreed to keep any covered information confidential and to not disclose it to any other party. The Agreement stated that any information exchanged between Plaintiff and Defendant is proprietary and designated as a trade secret and/or confidential. Plaintiff and Defendant entered into a confidentiality agreement (the “Agreement”). Plaintiff is the former employer of Defendant. Breaching a Confidentiality Agreement Can Lead to Serious Legal Liability
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