I keep telling consulting companies and employment agencies in New Jersey who want to sue my clients for violating non-compete agreements and other employment agreements to forget about it if they are not registered or licensed by the New Jersey Division of Consumer Protection. I guess they aren’t listening. New Jersey’s appellate court, in an unpublished opinion, Camo Technologies Inc. v. Pathan, Appellate Division Docket No. 25-2-2610, January 2, 2009, just affirmed a lower court’s decision to dismiss an employment agency’s case against its former consultant because it had failed to register with or become licensed by the State. When will these companies learn?
As I have blogged about before, employment agencies in the State of New Jersey must register with or become licensed by the New Jersey Division of Consumer Protection before doing business here. If a company fails to become registered or licensed, any employment agreements they enter into with their consultants are null and void from the inception. The law actually prohibits such consulting companies/employment agencies from bringing lawsuits to enforce agreements with its consultants. This is not a gray area of the law. Thanks to this recent Camo Technologies case, as well as the earlier cases, this principle of law is now well-established.
Camo Technologies and other unregistered/unlicensed employment agencies should be ashamed for suing consultants when they know that such lawsuits cannot be brought, let alone be successful. Unfortunately, many consultants, both domestic U.S. workers and those here on H1-B visas, are unaware of the law and the protections the law gives them. They may feel intimidated and decide to give in to their former employer’s unreasonable and unlawful demands.
If you are a consultant who is being sued or threatened with a lawsuit from your employment agency, seek out a reputable and experienced NJ employment contract and non-compete agreement attorney to assist you. Your former employer’s failure to register with or obtain a license from the State could be the “silver bullet” to help you quickly and successfully resolve your case.