Are Non-Compete Agreements Still Enforceable In Florida?

Non-compete agreements (NCAs) are instruments used by businesses to restrict their employees’ ability to work for competitors. However, a business wishing to impose a non-compete agreement on a departing employee must be certain that they are doing so appropriately. Most businesses use NCAs in an effort to protect trade secrets, which is a valid reason – but there are cases where this can go too far. As a business owner it is crucial for you to be aware of the appropriate times to use an NCA.

Protecting A “Legitimate Business Interest”

Non-compete agreements are often (though not always) executed at the start of a job, and they seek to prevent an employee from “competing” with the employer’s business if they leave their job. “Competing” can mean anything from simply working for a competitor to giving them information that could be considered trade secrets. These agreements last for a specific period of time (months or years, depending on the industry), given that permanently restraining an employee from “competition” could interfere with their ability to earn a living.

NCAs will differ in their exact form from state to state, though their ultimate objectives are the same. Each state will have its own criteria for enforceability for example, in Florida, a NCA is only valid if it can be shown to protect a “legitimate business interest” – for example, protecting trade secrets, client goodwill, or a specialized form of training. If no legitimate business interests exist in the case, a NCA will not be enforced.

Restrictions Must Be Reasonable

In addition to protecting a legitimate business interest, a non-compete agreement must be reasonable in terms of time and area. There are some industries where NCAs are common, but only if they are in accordance with the duration and geographical area that a reasonable person (or company) would cite. If an NCA is unreasonable or contrary to public policy, it will generally be deemed invalid, and the employee does not have to abide by its terms.

For example, if a radio DJ leaves a station in Tampa, they might be subject to an NCA that bars them from appearing on the air in Clearwater or Lakeland for 6 months, because they have the ability to leverage listener goodwill into making a lot of fans stop listening to the radio station. However, the NCA could not restrict them from being on the radio in that area permanently, or from accepting an on-air job outside the Tampa radio market.

Contact A Seminole, FL Business Law Attorney

Non-compete agreements have their place in many Florida industries, though there are specific legal criteria that they must meet in order to be enforceable against a departing employee. If you have questions or concerns about a non-compete agreement in use by your business, a Florida business law attorney at Hunt Law may be able to help get them managed. Contact our office today at (727) 471-0444 to schedule a consultation.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0500-0599/0542/Sections/0542.335.html