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Legitimate reasons for enforcing non-compete agreements

On Behalf of | Aug 16, 2018 | Business Litigation |

From time to time people in Florida need to find a new job. This could for a variety of reasons. For example, they could find that their current employment is not the right fit for them, or they may want to move up in their career but do not have those opportunities at their current company. Other times it is because they were laid off or fired from their current employment. Also, people may have gone back to school for a higher degree and want to utilize it. Whatever the reason for getting a new job, though, the person will most likely sign an employment contract before they start the new job.

These contracts generally state the terms of employment, but most also contain clauses such as non-compete agreements, which are designed to protect the company from potential damages if the employee later leaves or is fired. Companies work hard to develop relationships with customers, clients, suppliers and other people, and their employees inevitably will learn important information and form relationships with these people. So, it is important for employers that this hard work stays with the company and not the individual employee.

This is accomplished through non-compete clauses and other restrictive covenants that state that employees cannot either compete with the company after employment or disclose the company’s sensitive information. However, generally the courts do not want to restrict a person’s ability to earn a living.

So, to be valid these restrictive covenants must be in place to protect a legitimate business interest. A legitimate business interest is defined by statute as trade secrets and other valuable confidential information; significant relationships with customers; customer and client goodwill with the company’s businesses within a specific geographic, marketing or trade area; and specialized training for that specific line of work.

Non-compete covenants are common in Florida employment contracts. However, just because an employee signs one does not necessarily mean that it will be enforceable later. The non-compete agreement must be in place to protect a legitimate business interest among other requirements. It is important these are done correctly, to protect the interests of both the company and the employee.