As a Florida business owner, you know how important it is to take advantage of every strategy available to protect your company’s assets and interests. Therefore, you take proper precautions by executing a noncompetition agreement to safeguard internal information or other private affairs. In the event of breach, you probably assume it should be no problem to exercise your legal options. However, non-compete clauses are a very specific type of contract. You must meet certain requirements under Florida law on restrictive covenants to enforce your contractual rights.
One of the most critical factors in an enforcement action is proving that you have a “legitimate business interest” to protect. A Clearwater business litigation attorney can explain the five categories listed in the statute, which include.
Any information that is exclusive to your own business, not generally known to other companies, and can lead to an advantage for competitors may qualify as a trade secret. This category is an umbrella term that can comprise formulas, designs, calculations, processes, combinations of data, or collections of information.
Other Valuable, Confidential Business Information
Legitimate business interests that do not qualify as trade secrets may still be protected if there was a dedicated effort to develop the information and keep it private. In some cases, this may be database details gathered from a multitude of customers – which can potentially be used for marketing, referral patterns, purchasing trends, or remarketing opportunities.
Prospects, existing customers, patients, and clients are assets you work to develop over time. Employees and others with access to these customer lists could use the data for their own purposes to compete against your company. This information is typically considered a legitimate business interest even where:
- An employee brought or primed the customer to do business with your company, if that worker’s job description is based on this type of objective; and,
- The customer takes the lead in contacting your employee, who then takes steps to secure business opportunities.
This category of legitimate business interests refers to the reputation you have built as a company, due to your commitment to customer service and quality goods that you provide to customers; your company’s standing in the geographic area you serve can also be a factor. In most cases, you can enforce a non-competition clause if a former employee works to capitalize on your business goodwill through marketing or other promotions.
You hire, train, and develop employees to support your business goals, but these efforts must be extraordinary or specialized if you want to enforce a non-competition agreement. To be a legitimate business interest, you must usually implement a documented protocol for training that goes beyond what other companies in your industry would do.
Talk to a Clearwater, FL Contract Lawyer About Your Options
Proving legitimate business interests is just one aspect of enforcing a restrictive covenant. There are other factors involved to ensure enforceability, so you should trust our team of contract lawyers at Clearwater Business Law to help with strategy. For more information on how we assist companies throughout Pinellas County, please call (727) 785-5100 to set up a consultation.