A substantial proportion of Florida contract principles come from common law, which the US carried over from the British during colonial times and adapted through court decisions over many decades. However, there are a few areas where lawmakers have enacted legislation to cover contractual topics, and these provisions may supersede common law concepts. In the business world, an important section is Florida’s statute on restraints of trade, which prohibits contracts that disrupt commerce. On its surface, the law would ban companies from requiring employees to sign such restrictive covenants as non-compete agreements.
However, another statutory provision applies to these contracts. Florida law does allow agreements that prohibit competition so long as they strictly comply with two specific requirements. These criteria dictate whether the restrictive covenant is enforceable in court, so it is wise to get help from our Clearwater non-compete lawyer who has the foresight to ensure validity. The two keys to being able to enforce a noncompetition agreement are:
1. Legitimate Business Interest
When you require an employee to sign a covenant not to compete, you are imposing severe restrictions on that person’s ability to participate in the workforce and earn a living. As such, Florida law mandates that you have some lawful purpose with a non-compete agreement. When it comes to enforcement, you must have a legitimate business interest that the noncompetition clause is dedicated to protecting, such as:
- Solid business relationships with existing clients, patients, or customers;
- Marketing strategies and processes for attracting prospective customers;
- Computer software, solutions, processes, systems, and formulas;
- Trademarks, copyrights, patents, trade secrets, trade dress, or other intellectual property;
- Specialized, or unique training provided to employees;
- Customer lists;
- Reputation and goodwill.
2. Reasonableness Regarding Certain Terms
The second requirement for an enforceable non-compete agreement is that the restrictions must be reasonable, so the employee is not prevented from ever working in the same region or industry in the long term. By including the term “reasonable,” the statute is referring to limitations that would seem appropriate under the circumstances. A Florida contracts lawyer will guide you in drafting the paperwork, but keep in mind that a covenant not to complete is only valid if:
- The duration is reasonable, which could mean not allowing the employee to compete for 6 months or 1 year after leaving your company.
- The restrictive covenant is limited in terms of geographic scope, such as the county where your company does business or the employee’s sales territory.
- The activities considered to be competitive are reasonably restricted, such as preventing the employee from engaging in the same work.
Consult with a Clearwater, FL Business Law Attorney About Enforceable Non-Competes
You could set yourself up for frustration and disappointment if your noncompetition agreement is not enforceable under Florida law, so retain experienced legal counsel to avoid hassles. For more information, please call Clearwater Business Law at (727) 785-5100 to set up a consultation. After learning more about your circumstances, a Pinellas County business lawyer can advise you on structuring and drafting a non-compete agreement.