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

Authors: 
Mark Diana (Morristown),
Evan J. Shenkman (Morristown),
Published Date:
February 2013

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. 

Note: This article was published in the February 2013 issue of the New Jersey eAuthority.