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Are non-compete agreements enforceable?

On Behalf of | Dec 30, 2015 | Business Torts |

Competition is a healthy and necessary part of what makes Miami businesses thrive. At the same time, there are instances in which Miami businesses wish to avoid competition, like when former employees leave the company and join a competitor.

In order to prevent competitors from gaining an unfair edge or stealing company secrets, many businesses may seek to have their employees or others enter into non-compete agreements. However, questions can arise as to whether a violation of non-compete agreements is enforceable in court.

Under Florida law, a restraint of trade is enforceable only if it is reasonably necessary to protect one or more legitimate business interests. Accordingly, if the business can show the restriction is necessary to protect a legitimate business interest, then it may be protected in court.

Florida law sets out a number of examples of what constitutes a legitimate business interest. For instance, a company’s trade secrets or confidential business information qualifies as a legitimate business interest. The statute also identifies substantial relationships with customers and customer goodwill as protected interests. Finally, extraordinary or specialized training also qualifies as a legitimate business interest under the law.

The bottom line is that these interests are of the type that, if they were misappropriated by a competitor to use in competition against the business, it would be unfair and damaging to the business. On the other hand, if a business seeks to impose restrictive covenants that are not supported by a legitimate business interest, the statute deems these restrictions as void and unenforceable. Thus, it is important for businesses who want to enforce non-competition agreements to prove the restrictions satisfy the statute.

Source: Florida Legislature, “542.335,” accessed on Dec. 27, 2015