April 26, 2019 / 9:27 PM / 6 months ago

3rd Circuit upholds ADP's restrictions for employee stock awards

New Jersey payroll software company Automatic Data Processing had a legitimate business interest in requiring high-performing employees to sign non-compete agreements and similar pledges to qualify for stock option awards, a federal appeals court ruled.

In a unanimous opinion on Friday, a three-judge panel of the 3rd U.S. Circuit Court of Appeals vacated a lower court’s ruling finding the agreements unenforceable, saying they were necessary to protect ADP’s client relationships and goodwill, interests that New Jersey courts, “consistently recognize as legitimate.”

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