A non-compete agreement, also commonly called a restrictive covenant or a covenant not to compete, is an effective way to protect employers from unfair competition by their ex-employees. Fortunately for Florida employers, courts in the state routinely enforce such agreements. In this article, we discuss the essential elements of non-compete agreements and pitfalls to avoid when drafting such agreements.
Enforceability of Non-Compete Agreements
At a minimum, a non-compete agreement must meet the following requirements to be enforceable in Florida:
1) It must be in writing;
2) It must bear the signature of the employee; and
3) It must protect the legitimate business interests of the business.
Although every non-compete agreement is different, below are some of the essential elements of most non-compete agreements:
Duration: First, it is important to clearly define the duration of a non-compete agreement. Courts in Florida generally presume that restraints of six months or less are reasonable and restraints of more than two years are unreasonable.
Geographic Scope: Defining the territory to which the agreement applies is particularly important for non-compete agreements. In addition, the agreement should describe the type of business that the ex-employee is prohibited from performing within this area. When defining the geographic scope of the agreement, be sure to restrict it to the areas that you have a legitimate business interest in protecting.
Legitimate Business Interests: As noted above, non-compete agreements in Florida must protect the legitimate business interests of the business. Therefore, the agreement must clearly demonstrate that its restraints protect such interests. Courts don’t consider publicly available information a legitimate business interest. However, things like trade secrets, customer lists, and confidential information related to the business are afforded protection under a non-compete agreement.
Pitfalls to Avoid
When drafting a non-compete agreement in Florida, there are several pitfalls to avoid. For example, courts look closely at non-compete agreements to determine if they are reasonable. So, if an agreement appears to be designed to gain an unfair advantage over an ex-employee or to restrain all competition, then a court will interpret it as being an unreasonable restraint of commerce or trade and will, therefore, deem it invalid and unenforceable. To avoid this outcome, it is advisable to consult with an experienced attorney when drafting a non-compete agreement in Florida.
Contact a Florida Corporate and Business Law Attorney
As a business owner, it is imperative that your legal agreements are legally enforceable and well-drafted. Therefore, it is in your best interests to work with an experienced attorney on all contractual matters. At Gueronniere, P.A., founding attorney Grace de la Gueronniere provides legal services to business owners throughout the state of Florida. Ms. Gueronniere possesses the skills and knowledge necessary to fulfill all of your corporate and business law needs. Please contact us to schedule an initial consultation with our talented Florida attorney.