A non-compete agreement is a common business tool that faces much misunderstanding. Many employers and employees alike get the perception that a non-compete agreement is unenforceable. This is not necessarily the case. Non-compete agreements are extremely powerful because they essentially restrict an individual’s employment opportunities. Therefore the Florida law has enacted Florida Statute 542.335 to govern non-compete agreements. So long as the agreement is properly drafted; that it meets the terms of the statute, a court of law will enforce the agreement.Thus it is extremely important that both employers and employees understand their rights. An employer has rights against an employee who breaches a valid non-compete agreement. Similarly, an employee has a right to be free from improper or unlawful non-compete agreements–agreements that violate the statute. A non-compete agreement is a legal contract that carries real consequences such as monetary fines if breached. Knowing the permissible boundaries will help provide a harmonious employment relationship and spare both parties future headache and confusion down the road.
The statute requires the following in non-compete agreements:
- The agreement must be in writing and signed by the person against whom the enforcement is sought.
- The non-compete agreement must be reasonable in length of time and in geographical area.
- The non-compete agreement must have justification from a legitimate business interest.
Legitimate Government Interests include but are not limited to:
- Trade secrets (this in itself must meet a statutory definition).
- Valuable confidential business or professional information that does not otherwise qualify as trade secrets.
- Extraordinary or specialized training
- Substantial relationships with specific prospective or existing customers, patients or clients
- The statute expressly states that any non-compete agreement not supported by a legitimate business interest is unlawful and is void and unenforceable.
In addition, the statute governs not only employees but also distributors, dealers, franchisees and independent contractors from finding new employment in the same geographical area for a reasonable amount of time.
The statute determines what the courts shall find a reasonable and unreasonable length of duration for the non-compete agreement. In the event that the agreement is contested, the statute specifies what the party seeking to have the agreement enforced must prove in a court of law to have the agreement upheld.
Like most statutes governing businesses, the non-compete statute is complex. Non-compete agreements are powerful contracts that serve important business incentives. They can protect trade secrets or proprietary information that could cause a business to lose money in the event an employee leaves and finds employment elsewhere.
Employers should always have the assistance of attorneys experienced in drafting these important business contracts. When an employee subject to a non-compete agreement breaches the contract or seeks to have it invalidated, an agreement that meets the statutory requirements will be upheld in a court of law. When an employer fails to take time to draft a valid agreement, the business is putting its trade secrets and financial interests at risk. Valid agreements also protect the right of an employee to be free of unduly restriction from employment opportunities.
Dennis Hernandez can assist you in any issues relevant to non-compete agreements and other business litigation. Whether you seek assistance in drafting or enforcing a non-compete agreement, seek advice from experienced attorneys you can trust. For a consultation, call us today at (813) 250-0000