As a business owner and employer, you naturally want to protect your intellectual property and the share of the market you worked so hard to attain. The last thing you want is one of your employees taking information they learned to directly compete with you. That’s why many employers look into including non-compete clauses in their employment contracts. Non-competes are legal and enforceable in the state of Florida, but there are certain restrictions that you need to take into account.
Legitimate Business Interests
In order for a non-compete to be enforceable it must exist for a reasonable geographic area, for a reasonable time period and it must protect the employer’s legitimate business interests. Legitimate business interests can be defined as:
- Trade secrets
- Specialized training
- Professional information that is valuable to the business
- Any existing or prospective relationships with clients or customers
- Goodwill that is associated with your current business through promotions, location or a trademark
Five Ways Employees Get Out of Non-Competes
1. Employer Breach
Make sure that you have an attorney draft your non-compete language. If you want the ability to enforce the clause, you must make sure that you are fulfilling your end of the bargain. Failing to pay full compensation, fulfill insurance requirements or other obligations stated in the contract can nullify the document.
2. There are No Legitimate Business Interests to Enforce
Be sure not to exaggerate the importance of certain business interests. Non-compete clauses don’t really work for low-level employees or for employees starting a business similar to a part of your own that is being phased out. If your business decides to abandon a geographic area, a particular customer, or product/service, then it’s usually fair game for competition.
3. The Agreement is For Too Long
A non-compete must not extend for too long after the employee has left your company. A typical length that is appropriate is two years or less. Anywhere between six months to two years is a time period that must be argued as a reasonable time period. Two years or more is often considered unreasonable.
4. Your “Confidential” Information is Public Knowledge
Don’t overestimate your “secret sauce”. Any information that you use to conduct business must not be readily available for the average company or person to use if you want to uphold your non-compete clause. A customer list in a public business directory or a methodology of doing business that is readily accessible to the public is not considered confidential information.
5. Public Health or Safety
If there is a job shortage for a particular geographic area or a particular specialty, a non-compete may not be enforceable. This typically involves scientific and healthcare-related fields. For example, if there are only 5 heart surgeons that can perform a certain procedure, you likely won’t be able to prevent your employee from performing that procedure to save more lives.
Can I Enforce a Non-Compete Clause in Florida?
Yes, if you comply with the stipulations that accompany it. The first step is to make sure you contact a legal professional that can guide you through the process and draft a clause that that best suits your interests. Start by contacting Cipparone & Cipparone for the legal needs of your business.
**This blog is for general informational purposes only. Cipparone & Cipparone, P.A. does not distribute legal advice through this blog. As such, this blog does not constitute legal or other professional advice and no attorney-client relationship is created between the reader and Cipparone & Cipparone, P.A.Tags: Business Law