Non-compete contract: What’s in it for you?

On behalf of H. Clay Parker, Esq. posted in Noncompete Agreements on Friday, January 27, 2017.

When you go to your first day of orientation for your new job, someone may hand you a packet of papers to complete and sign. Among those papers, you will certainly find W-4 and direct deposit slips, an emergency contact form, a job description, and an employee handbook.

Finally, the human resources rep may slide across the table a document called a non-compete agreement. The rep may casually explain that by signing it, you are agreeing not to work for a competing company or start your own competing company – for a set amount of time — if you should ever leave this job.

What is the purpose of the non-compete?

In those few seconds, you may flash back to the many years and thousands of dollars you spent earning a degree or training for a job like this. On the first day of your dream job, you may eagerly sign that document, believing you could never imagine going to another company. However, legal advisors recommend that you take time to carefully consider what the contract demands of you.

While the rules on non-compete agreements differ from state to state, Florida businesses use them often with great success. Many business owners and managers find that the contracts protect them from former employees who might draw clients away or share important trade secrets.

How much can they ask of you?

Florida courts generally uphold a reasonable contract. The law in this state places two specific limits on what an employer can stipulate in the contract he or she asks you to sign:

1. That you may not work for a competing company for a length of between six months and two years after leaving your job

2. That you may not work for a competing company that is within 100 miles of your previous employer’s business

Any time longer than two years or distance greater than 100 miles may not uphold in court. In many cases, if you refuse to sign the agreement, the company may rescind the job offer. On the bright side, signing the agreement is an indication to many employers that you are planning to stay put, at least for a while. Because of this perceived commitment, they may be more likely to share trade secrets with you and trust you with important clients.

Should you sign it?

It is common to change jobs every four to five years. This could mean that, after leaving your present job, you may have to look for work outside your chosen field, at least until your non-compete expires. Because of this, you want to make sure the contract does not place any undue hardships on you by going beyond the reasonable scope of Florida law.

Your new employer will probably allow you to take the contract home and read it carefully. Before signing, advisors recommend that you review the document with an attorney. Your lawyer will explain the nuances of the contract language and the ramifications of signing it. Many employees have learned that the advice of an attorney on this matter may help them avoid a long, expensive lawsuit later on down the road.