Enforceability Of Non-compete Clauses In Florida
There are many reasons an employer may not want a leaving employee to open a competing business or join an established competitor after leaving the employer. Whether or not the employee leaves under friendly terms or is fired following a negative incident, the employer may want to protect its interests by restricting the kind of work the employee can do in some circumstances.
Generally, employers try to limit the kind of work a leaving employee may engage in through non-compete agreements. These kinds of agreements limit the kind of employment by requiring the employee to agree to not work in the same field or in a certain geographic location for a period of time. For example, an employer may require an employee to agree to not work as an engineer for any similar employer within a fifty mile radius for a period of one year.
Although widely used, non-compete agreements are not always enforced against employees in every state. In Florida, however, courts do enforce well drafted non-compete agreements, or non-compete clauses in employment agreements, if they are reasonable in both time and scope. The determination of the reasonability of the terms of the agreement is sometimes made on a case by case basis.
The employer also has to have a legitimate business interest in requiring an employee to agree to a non-compete clause. The employer has the burden of proving the legitimacy of the business interest. Some legitimate business interests include trade secrets, confidentiality of business or professional information, substantial relationships with customers, goodwill, and specialized training.
If a court determines that the employer’s non-compete clauses are too restrictive, the court can strike the agreement. In looking at the duration and scope of the non-compete agreement, the court may look at the line of business the agreement restricts the employee from taking. The kind of work the employee performed for the employer is also important in making this determination. For example, a non-compete clause may fail if the employer requires an employee, whose only work was to make pizza deliveries, to sign a non-compete agreement promising to refrain from taking on similar work in a ten mile radius.
When an employer seeks to enforce a non-compete agreement, the court may issue injunctions restricting the employee from taking a job that violates the terms of the non-compete agreement. Once a court issues an injunction, the former employee cannot take the job. This can be very devastating for the employee who may end up losing out on the job. For this reason, an employer seeking to enforce an agreement may be required to post bond in case a temporary injunction is granted but the court later finds that the non-compete agreement was void.
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Non-compete clauses may be very useful in protecting certain aspects of an employer’s business. It is therefore important to ensure that the non-compete clauses or agreements can be enforced in case of a breach by a former employee. In order to protect your business through the use of a non-compete agreement, contact an experienced business attorney in West Palm Beach, Florida, at McCabe Rabin, P.A.