Request for Refund and Waiver of Debt Request

Where an individual has received unemployment compensation benefits to which they were not entitled or eligible, the New Jersey Department of Labor has the ability to recoup those funds even when they were previously approved by issuing a Request for Refund. These Requests for Refund are often received at the same time or in addition to a Notice of Redetermination issued by the New Jersey Department of Labor indicating that Redetermination was made as to the individual’s eligibility for benefits. It is important to understand that the Request for Refund is a separate determination that must be separately appealed within the required time frame from the Notice of Redetermination which also must be appealed in the required timeframe. Under certain circumstances, it is possible that even where benefits were improperly received or paid, a request can be made to the New Jersey Department of Labor for a waiver of debt in accordance with N.J.A.C. 12:17-14.2 on the basis that recovery of the overpayment would be contrary to principles of equity. It may be helpful to consult with a New Jersey Unemployment Compensation attorney who is experienced an familiar with the applicable laws, rules and regulations with regard to requesting a waiver of debt or filing an appeal from a Request for Refund.

It may be important to seek the advice of a New Jersey Unemployment Compensation attorney or lawyer with respect to determining whether your qualify for New Jersey Unemployment Compensation benefits or a Request of Refund of benefits that you had received.

Restrictive Covenants/Non-Compete Agreements/Non-Solicitation Agreements: Preliminary Injunctions and Temporary Restraining Orders Employees are increasingly being required by employers to sign an Employment Agreement containing a Restrictive Covenant, Non-Compete Agreement or Non-Solicitation Agreement. Due to the complex legal rules and principles that exists and apply in determining whether and to what such agreement or restrictions are legally permissible, it may be important to seek the advice of a New Jersey attorney or lawyer with experience in handling issues relating to Restrictive Covenants, Non-Compete Agreements or Non-Solicitation Agreements before signing such an agreement, after having signed an agreement or when being threatened with legal action such as a Cease and Desist letter, or facing legal action by a former employer.

Employers will sometimes initiate legal action to enforce a restrictive covenant, non- compete agreement or non-solicitation agreement by filing an Order to Show Cause seeking a preliminary injunction or temporary restraining order. In New Jersey, a preliminary injunction is an “extraordinary equitable remedy” that is sparingly granted. E.g., Samsung America Inc. v. Park, 2006 WL 3627072 at *13 (App. Div. 2006); Dolan v. De Capua, 16 N.J. 599, 614 (1955). To overcome the hurdles inherent to obtaining preliminary injunctive relief, a party must demonstrate, by “clear and convincing evidence,” that: 1) injunctive relief is necessary to prevent irreparable harm; 2) the legal rights underlying the claim are well-settled; 3) the material facts are uncontroverted and a likelihood of success on the merits is demonstrated; and 4) a balancing of the hardships favors the moving party. Crowe v. De Gioia, 90 N.J. 126, 132-34 (1982); Ispahani v. Allied Domecq Retailing USA, 320 N.J. Super. 494, 498 (App. Div. 1999); American Employers’ Ins. Co. v. Elf Atochem N.A., Inc., 280 N.J. Super. 601, 611 n.8 (App. Div. 1995).

“Generally, the equitable relief of a preliminary injunction should not be entered except when necessary to prevent substantial, immediate and irreparable harm.” Subcarrier Comm., Inc. v. Day, 299 N.J. Super. 634 (App. Div. 1997) (citing Citizens Coach Co. v. Camden Horse R.R. Co., 29 N.J. Eq. 299, 303-04 (E&A 1878)). “Harm is generally considered irreparable in equity if it cannot be redressed adequately by monetary damages.” Crowe, 90 N.J. at 132-33. “In other words, plaintiff must have no adequate remedy at law.” Subcarrier Comm, Inc., 299 N.J. Super. at 683 (citing Green v. Piper, 80 N.J. Eq. 288, 293 (Ch. 1912)). As the United States Supreme Court explained:

[I]t seems clear that the temporary loss of income ultimately to be recovered does not usually constitute irreparable injury.... “The key word in this consideration is irreparable. Mere injuries, however substantial in terms of money, time and energy necessarily expended in the absence of a stay are not enough. The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm.”

Sampson v. Murray, 415 U.S. 61, 90 (1964) (quoting Virginia Petroleum Jobbers Assn v. FPC, 259 F.2d 921, 925 (D.C. Cir. 1958)). See also In re Arthur Treacher’s Franchise Litig., 689 F.2d 1137, 1145 (3d Cir. 1982) (“[W]e have never upheld an injunction where the claimed injury constituted a loss of money or loss capable of recoupment in a proper action at law.”). Here, other than its blanket assertion, plaintiffs have failed to present any evidence that it will suffer irreparable harm absent a preliminary injunction.

It is well established under New Jersey law that restrictive covenants cannot be used to extinguish ordinary competition. Ingersoll-Rand Co., 110 N.J. at 635. Moreover, New Jersey courts view covenants restricting an individual’s ability to practice his or her profession with considerable skepticism as potentially unlawful restraints on competition. The Community Hosp. Group. Inc. v. More, 183 N.J. 36, 57-58 (2005) (“restrictive covenant[s] may be disregarded or given complete or partial enforcement to the extent reasonable under the circumstances”).

On various occasions, the New Jersey Supreme Court has emphasized that “an employee’s covenant not to compete after the termination of his employment is not as freely enforceable [as other types of restrictive covenants] because of well recognized countervailing policy considerations”. Whitmyer Bros., Inc. v. Doyle, 58 N.J. 25, 33 (1971) (citing Solari Industries, Inc. v. Malady, 55 N.J. 571, 576 (1970)). Rather, such an agreement will be enforced only to the extent an employer can show: (1) the agreement is necessary to protect a legitimate interest of the employer; (2) the agreement does not impose undue hardship on the employee; and (3) the agreement does not impair the public interest. Given that agreements restraining trade contradict the public policy of this State, an employer seeking to enforce a non-competition agreement must bear the burden of proving the agreement's enforceability. See Ingersoll-Rand Co. v. Ciavatta, 110 N.J. 609, 640 (1988).

Although an employer has a legitimate interest in protecting his trade secrets as well as his confidential business information and customer relationships, an employer “has no legitimate interest in preventing competition as such. . . .” See Whitmyer Bros., 58 N.J. at 33. "[I]n cases where the employer’s interests do not rise to the level of a proprietary interest deserving of judicial protection, a court will conclude that a restrictive covenant merely stifles competition and therefore is unenforceable." See Ingersoll-Rand Company v. Ciavatta, 110 N.J. 609, 635 (1988) (citing Whitmyer, 58 N.J. at 35).

In Whitmyer, plaintiff sought enforcement of a restrictive covenant in an employment agreement seeking to preclude a former employee from being employed by a competitor. The employee had signed an Employment Agreement that contained a restrictive covenant prohibiting the employee from being “connected” in any manner with the “ownership, management, operation or control of any business' which in the opinion of Whitmyer’s Board of Directors [wa]s in 'competition with the business’ of Whitmyer.” Whitmyer, 58 N.J. at 28.

The trial judge concluded that the plaintiff was entitled to a preliminary injunction based solely on the fact that the employment was prohibited by the terms of the Agreement. In reversing the trial court’s entry of a preliminary injunction, the Appellate Division noted that the Trial Judge “made no findings as to the controverted factual issues nor did he define or point to the plaintiff’s 'legitimate interests' which he considered to be entitled to judicial protection by way of preliminary restraint. ” Id. at 30.

The court, relying on Solari, found that the entry of the restraints against Doyle preventing him from going to work for another company simply because it was competition with plaintiff was improper. The court noted that while the legitimate interests of the employer may include protection of his trade secrets and confidential business information along with his customer relationships, they “would not include the prevention of competition as such.” Id. at 35. The court stated as follows:

A post-employment restriction on an employee requires special justification which is non-existent where ‘the harm caused by service to another consists merely in the fact that the new employer becomes a more efficient competitor just as the first employer did through having a competent and efficient employee. A restraint on the employee is illegal when its purpose is the prevention of competition, accept when the methods of competition to be prevented are methods commonly regarded as improper and unfair.’

[Whitmyer, 58 N.J. at 36 (emphasis added) (citing 6 A Corbin, Contracts § 1394 at 100) (1962)).].

The court in Whitmyer cited to, and relied upon, the decision in Vanderwerf v. Zunica Realty Company, 59 Ill. App. 2d 173, 208 N.E. 2d 74 (1965) in which “[a] real estate salesman covenanted that he would not, within two [(2)] years after leaving his employment, engage in the real estate business within five [(5)] miles from his employer’s place of business.” In that case, the employee took no confidential information from his former employer nor did he solicit his former employer’s customers.

Although it was conceded that the area and time limitations were not unreasonable, the court denied injunctive relief on the grounds that protection of the employer’s legitimate interests did not require any restraint of the employee. In doing so, the court stated as follows:

Generally, how much protection is needed by an employer depends upon the legitimate interest for which he may claim protection. Legitimate interests is only another term to describe those “special circumstances” which render an employee’s restraint necessary, but protection against ordinary competition itself is not sufficient. The authorities indicate that the “special circumstances” which have been controlling and important in determining the reasonableness of the restraint imposed generally involve elements of trade secrets and unfair dealings. (citations omitted)

[Whitmyer, 58 N.J. at 35 (quoting Vanderwerf v. Zunica Realty Company, 59 Ill. App 2d 173, 208 N.E. 2d 74 (1965))].

Applying these principles, the court in Whitmyer concluded that although the plaintiff may have legitimate interests in protecting its customer relationships, the record did not support any preliminary relief. See also Mailman, Ross, Toyes and Shapiro v. Edelson, 183 N.J. Super 434 (Ch. Div. 1982) (denying plaintiff accounting firm’s request for a preliminary injunction seeking enforcement of a restrictive covenant against its former employee, in the absence of some showing either that defendant engaged in unfair competition amounting to tortious conduct).

In deciding this factor, courts engage in a balancing test in which the harm the plaintiff may experience if the relief is not granted is measured against the harm a defendant may suffer from the grant of the requested injunction. See Crowe, 90 N.J. at 134. “The purpose behind this balancing is to ensure that the issuance of an injunction would not harm the defendant more than a denial would harm the plaintiff.” Gruntal & Co., Inc. v. Steinberg, 837 F.Supp. 85, 93 (D.N.J. 1993).

Due to the complex legal rules and principles that exists and apply in determining whether and to what such agreement or restrictions are legally permissible, it may be important to seek the advice of a New Jersey attorney or lawyer with experience in handling issues relating to Restrictive Covenants, Non-Compete Agreements or Non-Solicitation Agreements before signing such an agreement, after having signed an agreement or when being threatened with legal action such as a Cease and Desist letter, or facing legal action by a former employer.