When a business hires an employee, they put trust and resources into that employee in training them and sharing trade secrets. Often, to protect their investment in the employee, they will have the employee sign a non-compete agreement. In this article, we will discuss the legal ramifications of non-compete agreements.
What are Non-Compete Agreements?
A non-compete agreement is a contract between an employer and employee that prevents the employee from working with the employer’s competitors after the employment with the employer is over. In other words, a non-compete agreement prevents a person, once they are no longer working at their job, to take a job with another business in the same industry.
Are Non-compete Agreements Legal in Florida?
Yes, under Florida statute 542.335, a non-compete agreement is enforceable to protect a “legitimate business interest”.
What Constitutes a “Legitimate Business Interest”?
Under Florida statute 542.335, a legitimate business interest includes the following:
- Confidential business information, such as if your business intends to merge with another company.
- Trade secrets, such as proprietary formulas.
- Customer or client lists, such as who your company is targeting as potential consumers.
- Geographic region.
Non-Compete Vs. Non-Disclosure Agreements
Although a non-compete agreement might include a non-disclosure agreement, the two are not the same. As mentioned already, a non-compete agreement prevents an employee from working for a competitor. A non-disclosure agreement prevents an employee from sharing confidential information with a competitor but does not prevent them from working for them.
Enforcing Non-Compete Agreements
The court system enforces non-compete agreements. In Florida, the most common ways to enforce a non-compete agreement is as follows:
- Obtaining a temporary injunction preventing the employee from working for the competitor for a short time.
- Obtaining a permanent injunction preventing the employee from working for the competitor at all.
- Monetary damages resulting from the harm that might have been caused by the employee working for the competitor.
- Filing a claim against the competitor for interfering with business practices by poaching.
Unenforceable Non-Compete Agreements
Yes, non-compete agreements can be non-enforceable if they are worded in a way where it prevents the employee from being able to find work in their field or includes too large of a geographical region. It is possible, however, that the Florida courts will attempt to save the non-compete agreement by rewriting the problematic parts to narrowly construe it.
How Can I Avoid That?
This is difficult to do if you are not familiar with Florida employment law. A non-compete agreement needs to protect the interests of the business without preventing the employee from finding additional employment opportunities. If you are a business and wish to have a non-compete agreement written for future employees or an employee who has been asked to sign a non-compete agreement, you should consult an attorney.
At Thompson Law, we have years of experience in both writing and interpreting non-compete agreements. We will work diligently to make sure your interests are protected.