In our healthcare law practice, one of the most common questions we hear from both physicians and practice owners is: Are non-compete agreements actually enforceable in New Jersey? The short answer is yes—but only to the extent that they are reasonable. The long answer involves a closer look at how these agreements are structured, enforced, and interpreted by New Jersey courts.

Non-compete agreements—also known as restrictive covenants—are typically included in physician employment contracts to prevent a departing doctor from immediately joining a nearby competitor or starting their own practice just down the road. For employers, these provisions are meant to protect business investments, patient relationships, and referral networks. For physicians, though, these clauses can feel like a professional roadblock, especially when trying to stay within their community or avoid uprooting their families.

New Jersey courts recognize this tension and have developed a fairly balanced approach. They will enforce a non-compete clause if it satisfies three key criteria: it must protect a legitimate business interest, it must not impose an undue hardship on the physician, and it must not harm the public interest.

That first part—protecting a legitimate interest—is usually the easiest to satisfy. A medical practice has every right to protect its patient base, its confidential business information, and its investment in physician training and support. But the analysis doesn’t stop there.

Next, the restriction must be reasonable in terms of geographic scope and duration. We often advise clients that most enforceable physician non-competes in New Jersey are limited to somewhere between 10 to 20 miles and last no longer than two years. Anything broader may raise red flags. A 50-mile restriction in densely populated Northern New Jersey, for example, could be seen as overreaching because it would effectively prevent the physician from practicing anywhere in the state. Courts are more likely to enforce narrower, well-justified boundaries.

Then there’s the hardship factor. Judges will weigh how the restriction affects the physician’s ability to earn a living. If a cardiologist is barred from practicing in their specialty throughout an entire region where they’ve built their career, the court may consider that an unreasonable burden—particularly if their options to practice elsewhere are limited.

Finally, public interest matters—especially in healthcare. If enforcing a non-compete would result in reduced patient access to care, especially in an underserved area, a court may choose not to enforce it. We’ve seen situations where hospitals or group practices tried to enforce restrictive covenants, only for the court to strike them down in favor of maintaining adequate healthcare access in the community.

That said, not all non-competes are invalidated. When drafted carefully and negotiated fairly, they can and do hold up in court. From the employer’s perspective, it’s crucial to make sure the agreement is tailored to the specific business needs of the practice. From the physician’s side, it’s equally important to understand what you’re signing—and to negotiate when necessary. Too often, we meet clients after a dispute has already started, when we could have helped prevent it with upfront legal review and clear contract language.

Whether you’re a practice owner looking to protect your business or a physician evaluating a new opportunity, non-compete agreements shouldn’t be taken lightly. These clauses carry real consequences for both sides and deserve careful legal attention.

At our firm, we help clients on both ends of the table understand what’s enforceable, what’s negotiable, and what best protects their long-term goals. If you’re entering into a new agreement or facing a potential non-compete dispute, we’re here to help you navigate it with clarity and confidence.