Non-Compete Agreements FAQs
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If you’re asking this question, “as an employer, can I enforce this non-compete?” the answer comes from whether or not the non-compete was prepared and/or reviewed by an attorney. You need to have it prepared and drafted well to begin with.
If you’re an employer and you wait until you’re ready to enforce a non-compete to determine if it’s enforceable or not, you’re already behind the ball.
A Non-Compete Must Be Reasonable and Justified. To answer the question, “is it enforceable?” there are really two things that Bloodworth Law will look for:
- A non-compete must be reasonable. Reasonable in time, geography, and scope.
- A non-compete must be justified by a legitimate business interest.
So a reasonable covenant in time for a Florida non-compete usually fits between six months and two years. But, each situation is different — sometimes shorter, sometimes longer is deemed reasonable. But in a typical situation, six months to two years is what we look for in a reasonable non-compete.
We also want to make sure that a Florida non-compete is appropriately limited in geography. So if you don’t do business in Washington State, you’re going to have difficulty enforcing your non-compete against someone in Washington State.
So it generally has to only apply to where you are actually doing business and it has to be reasonable from the point of view of the employee as well.
And then a Florida non-compete has to be reasonable in scope. So if you are, for example, a business that makes parts for cars, you can’t prohibit a machinist from doing work at a company that makes parts for airplanes.
It has to be reasonably related to the actual industries and service areas where this person would be in competition with you.
And then, second, a Florida non-compete must be justified by a legitimate business interest. So in order for the non-compete to be enforceable, this means it has to protect something that actually has some sort of legitimate value. Merely wanting someone to not compete with you is not a legitimate business interest.
So it has to be something like a trade secret that’s really important to you that this person has knowledge of. You’ve taught them, shown them or relied on them to work with you to create a trade secret.
You’ve hired someone to develop substantial relationships with your customers that need to be protected. You didn’t hire an employee to build relationships to then use as a competitor in their business.
You don’t want employees stealing any business from customers that you paid that employee to develop. If you hired them with the expectation they would add customers to your business, not for their business when they quit down the line, you have a right to protect your customers from poaching by employees or former employees. This is true if you have a quality non-compete agreement signed by your employees.
You don’t want to lose someone for whom you paid extraordinary training in funds and that you’ve invested in training this person for your business. If they’re trained, they can go out and compete against you if you don’t protect yourself and your company through a non-compete.
You don’t want to lose the customer goodwill that you’ve invested a lot of money in while creating an image of this individual as the face of your company. And you don’t want him or her to exploit that investment by using it to get business for another company.
These are the legitimate business interests you’ve got to show that you’re experiencing in order to enforce the non-compete.
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