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What You Should Know About Non-Compete Agreements in Florida

NonCompete

You’ve probably heard the phrase “non-compete agreement,” but many people do not understand what they are, whether they are enforceable, and the impact they may have on your ability to work or run a business. Non-compete agreements are contracts, or clauses within a longer contract, that restrict the ability to work in a particular field or industry, within a certain radius, and for a specific amount of time.  The most common form of non-compete agreements are those entered into between an employee and employer, where in consideration for future income and benefits, the employee may agree to give up the right to work for himself or herself or for another competing company.

Non-compete agreements often have a valuable purpose in certain industries, where employers do not want to expose the employee to the employer’s customers, provide special training to the employee, or give the employee access to proprietary information, only to have the employee leave and go work for a competitor.

Despite rumors otherwise, non-compete agreements are enforceable in Florida if there is a “legitimate business interest” that the employer is seeking to protect.  These agreements, however, are strictly and narrowly construed by the court to protect only the employer’s legitimate business interest.

In many situations, employees do not have enough bargaining power to refuse to enter into a non-compete agreement, if the employee wants the job.   When the employee wants to leave, or is forced to leave the job, the non-compete restrictions can significantly impede the employee’s ability to get another job within a certain geographic area.

As a result, employees must be careful to review any non-compete agreement (preferably with the help of an attorney) and any employer policies or handbooks that often contain a non-compete clause.

What Types of Restrictions within a Non-Compete Agreement Are Enforceable?

Two of the most important elements in enforcing a non-compete agreement are the scope and duration. The duration must be reasonable, which refers to how long the agreement is in effect once the employee leaves.  Scope refers to the geographic area.

For an employee, a court will presume reasonable any restriction of 6 months or less in duration and will find unreasonable a restriction of more than 2 years in duration.  A restriction of more than 6 months up to 2 years, however, will not be presumed reasonable or unreasonable, and will be enforceable as to duration if supported by a legitimate business interest.

What are Examples of Legitimate Business Interests? 

Examples of legitimate business interests include:

  • Extraordinary or specialized training;
  • Trade secrets;
  • Business or professional information that is deemed valuable to the company;
  • Goodwill associated with the business because of its trademark, marketing, or geographic location; and
  • Key relationships with prospective or existing customers, clients, or patients.

When Are Non-Compete Agreements Susceptible?

Non-compete agreements are susceptible to unenforceability for any of following issues, among others: :

  • When a court determines there is no legitimate business interest at stake for an employer to protect through enforcement of the covenant.
  • When the employer classifies as “confidential,” information that is not actually confidential. Information that is shared with third parties without restriction, information available on an employer’s website, information that is shared with employees without any agreement or understanding of confidentiality, information that is commonly known, and information that has been published are not considered confidential.
  • When an employer has breached its own contract, the breach may prevent the employer from enforcing the non-compete agreement. One common example is an employer’s failure to make payments to the employee as required.
  • When the non-compete agreement is too expansive in geographic radius, subject matter, or duration to protect the legitimate business interest at issue.

Contact a Florida Business Litigation Attorney

If you need an attorney with experience in litigating non-compete agreements, contact the West Palm Beach non-compete litigation lawyers at McCabe Rabin, P.A., today at 561-659-7878 to schedule an initial consultation.

 

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