ADP Cases Show Pitfalls Of One-Size-Fits-All Noncompetes

Law360 (August 19, 2019, 3:19 PM EDT) -- Very recently, the Superior Court of New Jersey’s Appellate Division entered an order deciding the appeals of rulings entered in six separate lawsuits filed by ADP LLC in 2016 and 2017 against former sales executives, each of whom left ADP to join its direct competitors.[1] In each of the underlying lawsuits before the Superior Court of New Jersey’s Chancery Division in Essex County, ADP sought to enforce various noncompetition and nonsolicitation covenants entered into by the former executives, primarily in conjunction with an annual restricted stock award program.

As part of this program, only ADP’s highest-level employees who met certain sales...

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