Blue Line Agreements

In its decision, the Third Circuit found that “if possible, the New Jersey courts have attempted to salvage restrictive alliances and have constructed [the Solaris] a three-part test so that it rarely justifies the total invalidization of a restrictive alliance.” With respect to the definition of “legitimate business interests,” the Third Circuit noted that New Jersey courts have always established that employers have “manifestly legitimate” interests in their trade secrets, confidential business information and customer relationships. When a restrictive contract goes beyond the legitimate interests of an employer, courts applying New Jersey law have generally used a blue pencil to achieve the legitimate purposes of the contract. Recently, ADP`s two former employees, Nicole Rafferty and Kristi Mork, challenged ADP`s restrictive agreements that prohibit them from applying for ADP employees for one year after their dismissal. Two New Jersey District Court judges ruled that ADP`s agreements were broad because they prohibited the recruitment not only of the employee`s clients, but of all ADP clients, including those whose employees knew nothing or with whom they did not work. District Judges Jose Linares and Claire Cecchi ruled that the agreements were anti-competitive and, in and of themselves, unenforceable. On April 26, 2019, the Third Circuit, which reviewed these appeals cases, ruled that the district court had improperly enforced the law. In particular, the preliminary bodies should, as far as possible, have “given blue” to the implementation agreements. She referred the cases to trial to consider blue pencils. The CAR is more restrictive than other agreements.

It contains a strengthened non-solicitation provision prohibiting employees from doing business within two years of the termination (voluntary or involuntary) of ADP customers to whom ADP “provides,” “provided” or “reasonably expected” within two years of the termination of the ADP employee. Unlike the SRA, which only prohibits the recruitment of ADP clients with whom former employees are “involved or exposed”, the CAR also prohibits the recruitment of all current and potential ADP clients. While the SRA limits the appeal of former employees to ADP`s “marketing partners,” CAR prevents former employees from applying for ADP`s Business Partners, which are defined as “recommendation partners” in addition to “marketing partners.” The Tribunal`s decision in ADP, LLC/.