What is the Solari test for non-competes in New Jersey?

The Solari test, from Solari Industries v. Malady (1970), requires that a non-compete protect a legitimate employer interest, not impose undue hardship on the employee, and not be injurious to the public interest. Courts also examine reasonableness of time, geography, and activity restrictions.

Can New Jersey courts modify an overbroad non-compete?

Yes. Under the Solari framework, New Jersey courts can reform unreasonable non-competes by modifying the time, geography, or activity restrictions to make them enforceable, rather than voiding the entire agreement.

How long can a non-compete last in New Jersey?

New Jersey courts have upheld non-competes of one to two years. The appropriate duration depends on the industry and how long the employer's competitive information remains valuable.

Non-Compete Agreements in New Jersey: The Legal Test

The General Rule in New Jersey

New Jersey enforces non-compete agreements under a well-developed common law framework. The seminal case Solari Industries, Inc. v. Malady (1970) established the three-part test that New Jersey courts continue to apply.

The Solari Three-Part Test

A non-compete is enforceable in New Jersey if it:

Protects the legitimate interests of the employer
Does not impose an undue hardship on the employee
Is not injurious to the public interest

Within this framework, courts examine whether the restrictions are reasonable in time, geography, and activity scope.

What Constitutes a Legitimate Interest

New Jersey courts recognize:

Trade secrets and proprietary information
Confidential customer information and relationships
Specialized training provided at the employer's expense
Investment in the employee's goodwill with clients

Simply preventing competition is not a legitimate interest. The employer must identify a specific protectable interest beyond the employee's general skills.

Reasonable Scope in New Jersey

Duration: New Jersey courts have upheld restrictions of one to two years. The courts look at the nature of the industry and how long competitive information remains valuable.
Geography: Must be proportionate to the employer's competitive area and the employee's territory. Given New Jersey's position in the New York and Philadelphia metropolitan areas, courts consider the practical impact of geographic restrictions on the employee's ability to work.
Activity restrictions: Must be limited to genuinely competitive activities. Courts disfavor restrictions that prevent an employee from working in an entire industry.

Judicial Reformation

New Jersey courts have the power to reform overbroad non-competes. Under Solari, if the court finds the restrictions unreasonable, it may modify the agreement to make it enforceable rather than invalidating it entirely. This gives employers a second chance but also means employees face some restriction even when the original terms were excessive.

Consideration

For new employees, employment is adequate consideration. For existing employees, continued employment can serve as consideration, but New Jersey courts examine the totality of circumstances. Additional consideration strengthens enforceability.

Red Flags

Duration beyond two years
Nationwide geographic scope for a regionally-focused role
No specific protectable interest identified
Prevents the employee from working in their entire field
No notice or opportunity to consult an attorney before signing

When to Consult a Lawyer

Consider consulting a New Jersey employment attorney if you are negotiating a non-compete as part of a job offer, if you plan to leave for a competitor in the New York or Philadelphia metro area, or if your employer is threatening legal action.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.