Terminating an employee who is subject to a restrictive covenant may void that agreement in states that permit and enforce them. For example, New York law provides that an employer cannot enforce a restrictive covenant if it terminated the employee. See, Buchanan Capital Markets, LLC v. DeLucca, 144 A.D. 3d 508 (N.Y. App. Div. 2016).
The law in New Jersey is unsettled at this time, but if the employer terminates an employee because of the coronavirus, I believe it is likely that New Jersey courts will not enforce the agreement at this time. An employee’s covenant not to compete is enforceable only if it is reasonable under all the circumstances in a particular case. Maw v. Advanced Clinical Commc’ns, Inc. 179 N.J. 439, 447 (2004).