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Can Employers Actually Enforce a Non-Compete Agreement?

NonCompete

Over the last several years, an increasing number of employees have been asked to sign non-compete agreements by their employees. As The Wall Street Journal has reported, litigation over non-compete agreements has exploded over the last decade. This raises some important questions:

  • How strong are non-compete agreements in Florida?
  • When can employees get out of these agreements?
  • Can Florida companies always enforce the terms of their non-compete agreement?

In this article, our top-rated West Palm Beach employment law attorneys highlight the most important things that you need to know about non-compete agreements and legal enforceability in Florida.

Florida Courts are Highly Suspicious of ‘Restrictive Covenants’

A non-compete agreement is fundamentally a restraint on trade and commerce. Under Florida law (Florida Statute 542.335), contractual restraints on trade/commerce can only be enforced if certain criteria are satisfied. Florida policymakers and courts will only enforce these agreements if they are deemed fair and if they have a legitimate business purpose. Specifically, non-compete agreements in Florida must meet the following three standards:

  1. They must be reasonable in duration;
  2. They must be reasonable in area of business; and
  3. They must be reasonable in geographic area.

If a non-compete agreement is found to be unreasonable, a Florida court can rule the agreement unenforceable. In other words, a non-compete agreement that puts unreasonable or unfair restrictions on the employee will be ruled to be invalid. This means that the employee will be able to get out of that agreement. In Florida, there are many different reasons why a non-compete may be ruled unenforceable by a court. Businesses using non-compete agreements must ensure that their contracts are properly drafted.

Non-Compete Agreements Must Be Carefully Defined  

If your company is using non-compete agreements to protect important business information or business practices, it is highly recommended that you work with an experienced Florida employment law attorney. By nature, these agreements are at risk of being invalidated by Florida courts.

It is crucial that companies ensure that they use carefully crafted non-compete agreements that conform to the specific circumstances of the unique relationship between the employer and the employee. Overly broad or standardized contract language can cause serious problems down the road.

As a general rule, a company using non-compete agreements should always be able to define a specific and legitimate business interest that will be protected by the agreement. For example, when the employee in question had access to trade secrets, proprietary information, or confidential records, a non-compete agreement may be more than appropriate. Should a dispute arise over a non-compete provision, employers may be able to negotiate a resolution without litigation.

Get Help With Your Non-Compete Agreement Dispute Today

At Pike & Lustig, LLP, our skilled Florida business law attorneys have extensive experience handling disputes related to the enforceability of non-compete agreements. If you or your company is involved in a dispute over a non-compete provision, please do not hesitate to reach out to us today for immediate legal guidance. We have law offices in West Palm Beach and Miami and we serve clients all over the region.

Resource:

wsj.com/articles/litigation-over-noncompete-clauses-is-rising-does-entrepreneurship-suffer-1376520622

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