What You Need to Know
In the past, non-compete agreements were reserved for high-level executives and professionals who had access to trade secrets and specialized, often expensive, training. Increasingly, however, businesses are asking employees at all levels to sign contracts that restrict their future employment.
Hairstylists, tattoo artists, mid-level sales reps and computer technicians now regularly agree to give up future opportunities as a condition of current employment and many are surprised when they realize they cannot accept a job after they leave their current position.
On the other side, businesses should understand the nature and extent of restrictions they are permitted to impose, because an overly broad non-compete agreement is unenforceable.
An Enforceable Non-Compete Under Florida Laws
A non-compete agreement is not intended to thwart competition, but rather to preserve the business’s competitive edge. An enforceable non-compete protects a business’s investment in its employees and keeps crucial information out of the hands of its competitors.
Florida Statutes §542.335 requires a valid non-compete contract to be reasonable in time, area and line of business; in writing and signed by the employee, and; justified by a legitimate business interest. The statute even provides some examples of what constitutes a legitimate business interest:
Trade secrets as defined by Florida Statute §688.002(4)
Other valuable confidential information that does not qualify as a trade secret
Potential or existing relationships with customers, patients or clients
Goodwill associated with trademark, trade name, service mark or trade dress
Goodwill associated with geographic location or marketing or trade area
Extraordinary or specialized training of the employee
Overly Broad Non-Compete Terms
Upon meeting the basic criteria established in Florida Statutes §542.335, the next issue is whether the terms of the contract are narrow enough in scope. Most non-compete agreements remain in effect for two years or less. Except under unusual circumstances, most courts would rule more than two years too long.
The scope of the geographic area and line of business depends on the nature and size of the business and the position being restricted. A business with a single Fort Myers location could likely not justify a non-compete that covered the whole state, whereas a large corporation might be able to prove a statewide restriction is warranted.
A reasonable line of business is one that relates to the tasks the employee was performing at his or her current job. For example, a restriction against all types of technology jobs would likely be unenforceable against a computer programmer who worked with one specific type of code.
When considering enforce-ability, the court views the non-compete agreement in the context of the circumstances of the company, the current position and the job that the business claims is in violation of the agreement.
Draft, Enforce or Fight a Non-Compete Agreement in Florida
Gunterfirm drafts non-compete agreements and enforces the contracts for business and we also defend against overly broad or otherwise unenforceable non-competes. Call our labor law firm at 239.334.7017 or contact us online to learn more details at your free initial consultation.