Are you worried that your key employees will go work for a competitor, taking all your important clients with them? Can you require your employee to sign a non-compete agreement in Florida? Are non-competes enforceable in Florida?
And what does Florida non-compete law say about an employee going to work for a competitor in spite of a non-compete agreement? The employment attorneys at Emmanuel Sheppard & Condon can answer all your questions and draft enforceable non-compete agreements in Florida.
In general, a non-compete agreement is a legal contract between two parties. Essentially, one party agrees not to engage in competing business activities against the other party.
Most often, employers use non-compete agreements with their high-level employees. Companies also can use non-competes when a business is sold, thus preventing the seller from immediately beginning a new competitive business.
If you want to use non-compete agreements, you need to follow the Florida statutes on non-compete agreements.
Are non-competes legal in Florida? Yes, if they are appropriately limited. Under the Florida non-compete statute, you must have a legitimate business interest to justify needing a non-compete. In addition, the non-compete agreement must be reasonable in time, place, and scope of restricted business activities.
According to the Florida non-compete statute, you need to show a legitimate business interest that the non-compete agreement will protect, such as:
If you lack a legitimate business interest, your non-compete agreements in Florida will be void.
You must draft a Florida non-compete agreement with reasonable restrictions on the employee. In other words, you may not prohibit your employee from ever working in your industry or in your region.
First, you must set the duration of the restrictions against competing to a reasonable time frame. Generally, you can restrict competitive activities while the employee works for you and for a reasonable time afterward.
For example, you may write the non-compete agreement to prohibit competition for the duration of employment and one year after separation.
Depending on the employee’s job and your business, you may determine that a longer time is appropriate. If your restriction lasts too long, however, the non-compete may not be enforceable.
Second, you must restrict competition within a reasonable geographic area. For example, for a salesperson with a three-state territory, you generally should limit the non-compete to those three states.
However, when protecting trade secrets or other more expansive interests, you may find that a broader geographic restriction is reasonable. Again, it will depend on the nature of each employee’s position and the business interests you seek to protect.
Finally, you should draft the non-compete agreement so as to restrict only the line of business in which that employee worked. For example, if your software salesperson sold only gaming software, you should restrict the employee from competing in the gaming software business.
When drafting time, place, and scope non-compete restrictions, do not be overly broad. Keep the restrictions reasonable as to each employee’s actual work and what is needed to protect your business.
If you learn that an employee or former employee may be violating their non-compete agreement, you need to take action to enforce the agreement. Depending on the circumstances, this may include various approaches or steps.
First, you need to remind the employee of their obligations under their non-compete agreement. During exit interviews, be sure to reinforce the post-employment restrictions that are included in the non-compete.
If an employee appears to be ignoring their non-compete, you can send a cease-and-desist letter. In the letter, you should instruct the employee to stop all competitive activities to prevent further enforcement action.
You can also contact the employee’s new employer. Many times, a new employer is unaware that an employee had signed a non-compete agreement. After you make it known to the new employer, many will stop using that employee for competing activities.
If the employee continues to ignore the non-compete agreement, you may need to enforce it in arbitration or court. Depending on what you specified in the agreement, you may be entitled to an injunction to stop the employee from engaging in a competitive business.
You also may recover monetary damages caused by the breach of the non-compete in Florida. Be aware that the arbitrator or judge will look to the Florida statute on non-compete agreements to determine if the agreement is enforceable.
If not drafted correctly, your non-compete agreement can be void and unenforceable. So, if your business is worth protecting, it is worth hiring the experienced employment lawyers at Emmanuel Sheppard & Condon to draft your non-compete agreements.
We can analyze your business interests and draft agreements that will be upheld in court. Contact us today so that together, we can use the Florida non-compete statute to your advantage.