Occupation limits
New Jersey Non-Compete Law (2026): Enforceable; ban reintroduced
New Jersey still resolves noncompete disputes with the Solari factors, asking whether the restraint protects a legitimate interest, spares the employee undue hardship, and leaves the public unharmed, and judges here will narrow an overbroad clause rather than void it. Licensed psychologists are the notable exception, since their board's ethics rule forbids practice restrictions outright. A sweeping ban has now been introduced in four consecutive sessions and was reintroduced as S1407 and A1829 in January 2026 without reaching a floor vote in either house.
The rule
How New Jersey treats non-compete agreements
New Jersey's willingness to partially enforce is the practical difference from neighboring states: an overbroad clause here typically gets shortened rather than thrown out, which raises the cost of ignoring it. And the perennial reform bill has repeatedly cleared a committee without ever getting a floor vote, so committee movement alone is a weak predictor of enactment.
If you are an employer
Your covenants remain enforceable if they are tailored, but build a file now on which employees would qualify as senior executives and what garden leave would cost, because the reintroduced bill would require both a 12-month ceiling and full pay during the restraint.
If you are a worker
Reasonable New Jersey noncompetes are still enforced and can even be rewritten by a judge to fit, so do not assume the pending ban protects you; psychologists, by contrast, cannot be bound at all.
| Classification | Common-law reasonableness; narrow professional carve-outs; broad ban proposed again |
|---|---|
| Pay threshold | None in force. The pending bill would preserve noncompetes only for 'senior executives' who made at least $151,164 in the year before separation and hold policy-making authority. |
| Maximum term | No cap today. Courts have accepted one to two years where the employer's interest supports it. The pending bill would cut the outer limit to 12 months even for senior executives. |
| Notice or consideration | Nothing is required now. Under S1407/A1829 an employer would have to tell affected workers within 30 business days of enactment that their existing covenants are unenforceable. |
| Primary statute | No general statute; common law governs. N.J.A.C. 13:42-10.16 bars restrictive covenants for licensed psychologists. Pending: S1407 / A1829 (2026-2027). |
Detail
What has changed, and what is still moving
Legislation 2024–2026
No noncompete statute has been enacted. A5708 cleared the Assembly Labor Committee 8-2 on December 4, 2025 but neither it nor S4385 reached a floor vote before the session ended January 13, 2026, so both lapsed.
Bills to watch
S1407 and A1829, introduced January 13, 2026 and pending in the Senate and Assembly Labor Committees. They would bar employers from seeking, requiring, demanding, accepting or enforcing a noncompete against almost every worker; permit a maximum 12-month restraint on senior executives paid 100% of salary and benefits as garden leave; confine geography to areas the worker actually served in the prior two years; void no-poach agreements; and let workers sue within two years for up to $10,000 in liquidated damages plus lost pay and fees.
Leading cases
Solari Industries, Inc. v. Malady, 55 N.J. 571 (1970), and Whitmyer Bros. v. Doyle, 58 N.J. 25 (1971), supply the three-part test and authorize partial enforcement of an overbroad covenant. Comprehensive Psychology System, P.C. v. Prince, 375 N.J. Super. 273 (App. Div. 2005), refused to enforce a covenant against a psychologist by relying on the licensing board's rule rather than the reasonableness test.
If you have one in hand
What can make a non-compete unenforceable in New Jersey
- Your occupation is carved out. Common-law reasonableness; narrow professional carve-outs; broad ban proposed again
- The scope is wider than the interest behind it. A restriction that reaches beyond the customers, trade secrets or goodwill the employer can actually point to is the most common reason a covenant fails in New Jersey.
Whether any of these applies turns on the wording of your own agreement, your role and the case law your court follows. This page maps the statutory landscape; it does not replace advice on a specific contract.
FAQ
New Jersey non-compete questions
Are non-compete agreements enforceable in New Jersey?
New Jersey still resolves noncompete disputes with the Solari factors, asking whether the restraint protects a legitimate interest, spares the employee undue hardship, and leaves the public unharmed, and judges here will narrow an overbroad clause rather than void it. Licensed psychologists are the notable exception, since their board's ethics rule forbids practice restrictions outright. A sweeping ban has now been introduced in four consecutive sessions and was reintroduced as S1407 and A1829 in January 2026 without reaching a floor vote in either house.
How long can a non-compete last in New Jersey?
No cap today. Courts have accepted one to two years where the employer's interest supports it. The pending bill would cut the outer limit to 12 months even for senior executives.
Is there a minimum salary for non-competes in New Jersey?
No. New Jersey sets no income floor, so pay alone does not decide whether a covenant binds you. The test is whether the restriction goes further than the employer's legitimate interest requires in time, geography and scope of work.
What notice or consideration does New Jersey require?
Nothing is required now. Under S1407/A1829 an employer would have to tell affected workers within 30 business days of enactment that their existing covenants are unenforceable.
Sources
How this entry was checked
- Primary source. No general statute; common law governs. N.J.A.C. 13:42-10.16 bars restrictive covenants for licensed psychologists. Pending: S1407 / A1829 (2026-2027). — the statutory text itself.
- Secondary sources consulted. N.J. Legislature (S1407, A1829), LegiScan, Ogletree, Epstein Becker Green, N.J.A.C. 13:42-10.16, Solari v. Malady.
Check it against a third party
None of these is ours. If a figure here matters to a decision, verify it:
- Federal Trade Commission — non-compete hub
- Economic Innovation Group — State Noncompete Law Tracker
- Fair Competition Law (Beck Reed Riden) — 50-state legislation tracker
- GAO-23-103785 — Noncompete Agreements (May 2023)
This page is general legal information published by Jurizmo and is not legal advice, does not create an attorney-client relationship, and may not reflect amendments enacted after the review date above. Consult a licensed attorney in the relevant state before acting on any agreement.