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Non-Competition Agreement Triggered Upon Break in Service, New Jersey Appellate Division Holds

By Mark Diana
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In Truong, LLC d/b/a V.I.P. Nails v. Tran, Le et al., 2013 N.J. Super. Unpub. LEXIS 64 (N.J. App. Div., Jan. 9, 2013), the New Jersey Appellate Division held that a two-year non-competition agreement was triggered upon an employee’s four-month break in service, after which the employee was rehired and worked for two more years before leaving to open a competing nail salon. As a result, the non-compete had expired by the time the employee left to start a competing business.

In Truong, LLC d/b/a V.I.P. Nails v. Tran, Le et al., 2013 N.J. Super. Unpub. LEXIS 64 (N.J. App. Div., Jan. 9, 2013), the New Jersey Appellate Division held that a two-year non-competition agreement was triggered upon an employee’s four-month break in service, after which the employee was rehired and worked for two more years before leaving to open a competing nail salon. As a result, the non-compete had expired by the time the employee left to start a competing business. This opinion provides an important reminder for employers to reissue non-competes to their employees upon any breaks in service.

Author

Mark Diana
Managing Director, Morristown

Topics

Employment Law, Unfair Competition and Trade Secrets

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