By: Kun Zhao, Esq.

Where an employer’s most valuable assets are trade secrets, such as sensitive technical and commercial information that are not generally known to the public, the employer will often require its employees execute two types of agreements to protect its trade secrets and maintain its competitive edge in the marketplace: (1) a confidentiality/non-disclosure agreement and (2) a non-competition agreement.

The purpose of a confidentiality agreement is to require an employee who receives confidential information not to disclose such information to any other person and to keep it a secret. On the other hand, the purpose of a non-competition agreement is to limit the employee’s actions following termination and to prevent the employee from using resources, knowledge, sensitive trade secrets, and/or leads gained during the employment to directly or indirectly compete with the employer.

While confidentiality agreements are generally enforceable in New Jersey and New York, restrictive covenants on competition, such as a non-competition agreement, are not favored in the law. Under the New Jersey and New York law, only a reasonable non-competition agreement is enforceable by the court.

The reasonableness of a non-competition agreement is to be determined on a case by case basis. In drafting a non-competition agreement to protect its business interests, an employer needs to determine whether (1) the restrictive covenant is necessary to protect its legitimate interests, (2) whether it would cause undue hardship to the employee, and (3) whether it would be injurious to the public.

To be reasonable, employers need to show that they have a legitimate interest in restricting competition, such as protecting confidential business information, protecting its investment in the training of its employee, or protecting its client bases. Beyond that, three additional factors should be considered in determining whether the restrictive covenant is not overbroad: (1) its duration, (2) the geographic limits, and (3) the scope of activities prohibited. Each of these factors must be narrowly tailored to ensure the covenant is no broader than necessary to protect the employer’s interests.

We at Hill Wallack LLP stand ready to assist with any questions and assistance needed in drafting and preparing confidentiality agreements and non-competition agreements to protect your business interests.

By: Kun Zhao, Esq.

Foreign investment is constrained by U.S. laws that bar foreign ownership and limit activities in industrial sectors as maritime, aircraft, mining, energy, communications, banking, transportation, and government contracting. However, there is no sector within which foreign investors are excluded by federal law from any type of investing. The sector-specific federal laws that apply to foreign investors vary in the types and levels of restrictions and provisions they contain.

The government review and approval process applies to foreign investment in existing U.S. companies or businesses engaged in interstate commerce through mergers, acquisition or takeover. Those reviews include: (1) review by the Department of Defense under the National Industrial Security Program (NISP); (2) review by Committee on Foreign Investment in the United States; and (3) review by Director of National Intelligence (“DNI”). Generally, those reviews operate independently, although at times they may overlap.

Disclosure requirements under certain federal statutes are not restrictions on foreign investment per se but additional compliance obligations. There are two principal federal laws which impose disclosure obligations on foreign investments: (1) the International Investment and Trade in Services Survey Act of 1976 (“IITSSA”); and (2) the Agricultural Foreign Investment Disclosure Act of 1978 (“AFIDA”).

Even though there are sector-specific and various levels of restrictions on foreign investment, the United States is still largely open to foreign direct investment. No federal laws completely exclude foreign investment from an industry sector. As long as it is not related to above identified sectors and critical industries and technologies essential to national security, there are generally no federal restrictions limiting ownership and activities of foreign investment in the United States.

New Jersey uniquely sits in center of the tri-state region that has 100 million consumers with a collective purchasing power of $2 trillion, connecting New York City and Philadelphia. It also gains the competitive edge by its complete infrastructure and fully-developed network of transportation.

From 2003 to 2010, with its consistent policies and continued dedication to grow international trade and foreign direct investment (“FDI”), New Jersey has received $227 million in direct investment from China. The Christie Administration has shown a new, unprecedented commitment to growing exports and FDI. Since Governor Christie took office, there have been14 new FDI projects, representing $1.4 billion of new capital investment in New Jersey. China has become one of the primary contributors.

A great number of major corporations from China are headquartered or actively operating in New Jersey, including Huawei Technologies (USA) in Bridgewater, Huahai US, Inc. in Cranbury, China Construction America, Inc. in Jersey City, Hisun USA, Inc. in Princeton, and Minmetals Corporation in Weehawken.

With its unique geographic location, efficient market reach and firm government commitment, New Jersey will undoubtedly continue to be an important trading partner with China and be one of the most favorable destinations of FDI from China.

By: Kun Zhao, Esq.

The United States is the largest trading partner of China. With the trading volume reaching $385.3 billion in 2010, disputes between companies in both countries in the international trading and investment business arena are unavoidable and mounting.

When resolution through good faith negotiations is infeasible and lawsuits are inevitable, parties will be predisposed to file litigation in their domestic forums. In this context, the critical question is whether a domestic judgment will be enforceable in the other country. As to Chinese companies, the general answer is yes in New Jersey, New York, and also many other states in the U.S.

In the United States, state law governs the recognition of judgments by a foreign country or sister state. In 1962, the National Conference of Commissioners on Uniform State Laws approved and recommended for enactment the Uniform Foreign Money-Judgments Recognition Act (“UFMJRA”). The UFMJRA applies to non-U.S. court judgments granting or denying the recovery of a sum of money. More than half of the states, including New Jersey and New York, have adopted the UFMJRA or some part of it.

In New Jersey, the Foreign Country Money-Judgment Recognition Act, N.J.S.A. 2A:49A-16 to 24 (“FCMJRA”), provides the statutory basis for enforcing judgments of other nations in New Jersey. According to FCMJRA, New Jersey’s courts must recognize a final foreign country judgment for money damages unless the judgment debtor establishes one of the specific grounds for non-recognition that are enumerated in the FCMJRA. New York Civil Practice Laws and Rules Article 53 largely mirrors New Jersey FCMJRA.

A  judgment rendered in China has been recognized in United States District Court for the Central District of California and affirmed by the Ninth Circuit, where California has similar laws adopting Uniform Foreign Money-Judgments Recognition Act. See, Hubei Gezhouba Sanlian Industrial Co. v. Robinson Helicopter Company, Inc., 2009 WL 2190187 (C.D. Cal. 2009), affirmed, 425 Fed.Appx. 580, 2011 WL 1130451 (9th Cir. 2011).

Therefore, monetary judgments of competent courts in China may be enforced in New Jersey and New York without a prior determination by state courts. In New Jersey, such money-judgments may be enforced by filing with the Clerk pursuant to N.J.S.A. 2A:59A-27.