In today’s competitive business landscape, Florida employers frequently utilize non-compete agreements to shield their legitimate business interests. A non-compete prohibits an employee agrees not to compete with their employer’s business during employment, or work in or start a competing business for a fixed period of time after leaving the employer. Noncompete clauses are often used by companies in high-tech industries and in the sales and marketing fields, where knowledge of trade secrets or customer lists could be valuable to a competitor.
However, for these agreements to hold legal weight, they must comply with legal specific requirements. Florida law recognizes the need to balance an employer’s business interests with an employee’s right to seek new opportunities. A valid non-compete agreement aims to safeguard one or more of the following legitimate interests:
- Trade secrets — These encompass formulas, techniques, or programs not widely known to the public. Protecting confidential information that gives a company a competitive edge is a compelling reason for a non-compete restriction.
- Confidential business information — Customer lists, marketing strategies, and pricing data are just a few examples of valuable, non-public information that a non-compete agreement can shield.
- Customer relationships — Businesses invest significant time and resources in building relationships with clients. A non-compete agreement can help prevent departing employees from soliciting these established customers for a competitor.
- Goodwill — The intangible value associated with a company’s brand identity and reputation is considered goodwill. Non-compete agreements can be used to prevent an employee from leveraging their association with the company to damage its goodwill.
- Extraordinary training — In rare cases, if an employer invests heavily in specialized training for an employee, a non-compete agreement may be justified to prevent the employee from using that training to benefit a competitor immediately.
While protecting legitimate business interests is a valid purpose for a noncomplete, a non-compete agreement cannot be so restrictive that it significantly hinders the employee’s ability to find new work in their field. The scope of the restriction needs to be tailored to the specific interest being protected.
The duration of a non-compete agreement must be reasonable in relation to the protected interest. Florida statutes provide a presumption of reasonableness for certain timeframes. For example, agreements lasting six months or less are generally considered reasonable, while those exceeding two years are presumed unreasonable. The specific circumstances of each case will determine the appropriate time limit.
Similar to time constraints, geographical limitations imposed by a non-compete agreement must be reasonable. Restricting an employee from working within the entire state of Florida for a landscaping job might be deemed excessive, while a regional restriction focused on the employer’s established clientele could be considered fair.
Before you draft or sign a non-compete agreement, consult with a central Florida noncompete agreement lawyer for guidance on its enforceability.
Clay Parker, Esq. advises Central Florida clients on a full range of contract matters, including non-competition agreements and employment contracts. Please call 407-216-2504 or contact us online to schedule an appointment at our Orlando office.
