Using a Noncompete Agreement
Expanding your business can be exciting. Hiring new personnel to help fulfill big business goals and drive growth is a rewarding task. However, this task comes with responsibilities that you must keep in mind as an employer. One of those responsibilities is the reality that the prospective employee you intend to hire may not stay with your business forever and may be inclined to compromise your business after leaving. Because of the reality of such a situation, it is important that you do everything you can to protect your business from ex-employees. One common and effective way to do this is by using non-compete agreements. If you want additional information about a non-compete agreement draft for your business or other ways to protect your business, you should speak to an attorney about your options.
Imagine that you hire a promising new candidate. In an effort to ensure your new employee’s growth, you provide them with special training and increasing leadership opportunities, allowing the employee to build substantial relationships with your client base. You teach your new employee the tricks of the trade and give them access to confidential business information for their understanding. Imagine that unfortunately, the employee decides to leave your business and work for your competitor or for themselves. Instead of starting fresh at a new place of employment, the ex-employee has contacted some of your customers whom they serviced and they built relationships with during their tenure at your business. What could you do if the employee takes a significant amount of your customers? How could you have protected yourself from this situation in the first place?
What Is A Non-Compete Agreement?
A non-compete agreement is a contract an employee signs promising not to compete with their employer. Few things could be more damaging than an employee who has had access to trade secrets, confidential business information, relationships with customers, and special training with your business who decides to use those things that made them an asset to your business to hurt your business. This could mean taking customers, using confidential business information against you, and using trade secrets.
Will My Non-Compete Agreement Be Enforceable?
In Florida, non-compete agreements have significant requirements in order to be enforced. The requirements are as follows:
- The agreement must be in writing and the employee must have signed it;
- The agreement has to further a legitimate business interest. The statute defines a legitimate business interest as encompassing trade secrets, valuable confidential business or professional information that do not quite qualify as trade secrets, significant customer relationships, and extraordinary or specialized training; and
- The agreement must be reasonable regarding time, area, and line of business. Florida will not enforce a non-compete agreement that limits an employee too strictly. The non-compete must be drafted to meet the needs of the business, not simply to limit the employee because it can. Therefore, a court will analyze a non-compete agreement to ensure that the employee was not bound to unreasonable terms.
No business wants to encounter unnecessary litigation and it is unadvisable to employ legal processes such as litigation or additional agreement drafting if it is not necessary because they can be costly. Despite this, there is often a need for businesses to use non-compete agreements when hiring certain personnel. Whether you are questioning your business’ need for non-compete agreements or whether you know that you are in need of enforcing one, you should contact the West Palm Beach attorneys at Pike & Lustig, LLP immediately for help. Our Florida business litigation attorneys are able to help you protect your business.