By: Walter Gonzalez, Esq., Francine Foner, Esq. and Ty Hyderally, Esq.

July 31, 2025                                  

New Jersey Senate Bills 4385 and 4396 have the potential to dramatically reshape how employers use non-compete and no-poach agreements in New Jersey. While both bills are still in their early stages, Bill 4385, introduced to the Senate on May 19, 2025, and Bill 4386, introduced on May 22, 2025, have the potential for significant impact.  The Bills broad scope and retroactive impact demand attention from anyone who signs, enforces, or is bound by these types of agreements. The issue is certainly not a new one, but the newly introduced State Senate bills could expand further what the Federal Trade Commission attempted to achieve over a year ago.

A Closer Look at the Bills

S.B. 4385: Narrowing Non-Competes to a Razor’s Edge

This bill would effectively ban most non-compete and no-poach agreements in New Jersey, including those involving independent contractors, interns, temporary workers, and volunteers.

Key takeaways:

• Retroactive effect: Existing agreements would no longer be enforceable.
• Limited carveout: Only certain “senior executives” earning above $151,164/year in policy-making roles could be subject to a non-compete—and only under tight conditions (12-month max, geographic limits, and salary continuation during the restriction).
• Advance notice: Employers must notify affected employees that non-competes are void.
• Enforcement teeth: Workers can seek damages, lost wages, and attorney’s fees.

S.B. 4386: A Broader Sweep on Worker Freedom

This companion bill goes a step further by targeting any post-employment restriction—particularly those tied to repayment of training costs, immigration-related fees, or hiring incentives. If passed:

• Employers can no longer claw back those costs when an employee leaves.
• Past and current employees must be informed that these clauses are void.
• Violations could result in $5,000 penalties per worker, plus potential punitive damages.

Although these proposals are still under legislative review, they offer a clear signal: New Jersey is leaning toward joining states like California and Minnesota in protecting worker mobility.

For workers, these bills represent a meaningful step toward greater post-employment freedom—particularly for those in lower-wage or mid-level positions who are often most affected by restrictive clauses. We will continue to track these proposals closely in the months ahead.

If you have any questions regarding your rights as an employee, you should seek an experienced attorney who concentrates in employment law. Our firm has been concentrating in employment law for over twenty-two (22) years!

En nuestra firma hablamos español. This blog is for informational purposes only. It does not constitute legal advice and may not reasonably be relied upon as such. If you face a legal issue, you should consult a qualified attorney for independent legal advice regarding your particular set of facts. This blog may constitute attorney advertising. This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state or jurisdiction.