In the United States, non-compete agreements are subject to constant debate. While many states agree that it is unfair to enforce this type of contract, other states (including Florida) assert that they are a necessary tool to ensure competitiveness in a free market society.
It is widely known that Florida is a business-oriented state, figuring amongst the top 5 economic powerhouses in the United States. Accordingly, courts in Florida tend to recognize non-compete agreements in favor of employers.
However, it also means that companies must meet several requirements if they want a non-compete agreement to be considered valid in court.
In this article, you will learn how to write a non-compete agreement the right way.
What Is a Non-Compete Agreement?
A non-compete agreement is a legal agreement in which an employee promises not to compete with an employer’s business during a specified period and location, either during or post-employment.
The purpose of a non-compete agreement is to ensure that employees, contractors, licensees, and distributors are prevented from learning the employers business activities, and at some point, becoming a direct competition.
Plus, on occasion, some employees leave a business only to open up a new company based on the same business activity.
In such a case, all the knowledge and experience acquired by the employee in his previous occupation was used to create a competitive edge that will affect the ex-employer directly. Hence, business owners in Florida can utilize non-compete agreements in a preventive manner.
Never Use Non-Compete Agreements for Every Employee in a Company
Even small business owners in Florida can utilize non-competes to protect a legitimate business interest, regardless of the number of employees in the company.
For those unaware, “legitimate business interest” is defined by Florida Statute to include, but not be limited to:
- Trade secrets.
- Valuable confidential business or professional information that otherwise does not qualify as trade secrets.
- Substantial relationships with specific prospective or existing customers, patients, or clients.
Regardless of the company’s size and nature of the business, it is not ideal to have a blanket non-compete agreement for all employees to sign. Pre-drafted agreements are not a good idea, as it is better to draft a contract addressing each specific situation, with specific clauses, length of time of contract or employment, geographic restriction, etc.
Plus, it is not recommendable that business owners utilize non-compete agreements with low-level employees that do not have access to any confidential information, business lists, or trading secrets.
Instead, the right way to do it would be tailoring an agreement solely for high-level employees (executives, managers, specialists, etc.) who have direct access to some type of legitimate business interest.
You Must Utilize Explicit Business Language
Firstly, any non-compete agreement must be in writing. Also, a written contract signed by an employee will give you more evidence to be used in the court, if necessary.
Remember that you must utilize explicit business language when drafting the agreement, addressing every clause as directly and clearly as possible. Do not use overly broad concepts or vague terms that will not help you in case you need to enforce it.
In Florida, employers have the burden to prove that the business interests identified in the agreement are legitimate. In this sense, being explicit and clear when drafting the terms is crucial to ensure you have an advantage in the court.
Reasonable Length of Time and Geographic Restriction
In Florida, any non-compete agreement which is not considered reasonable has little to no chance to be enforced in court.
In terms of length of time, any restraint 6 months long or less is considered presumably reasonable, while restraints with more than 2 years are presumed unreasonable.
However, on some occasions a court has enforced a non-compete agreement with a restraint longer than 2 years, showing that courts also determine reasonableness on a case-by-case basis.
Employers must pay attention to the geographic location restricted in the agreement. The area restricted by the agreement can be determined by county, distance, or geographic area (e.g., Miami City).
Consequently, remember to never draft non-compete agreement(s) that apply to territories in which you do not conduct business. In case you want the agreement to be recognized in other states, never rely on DIY contracts or algorithm-driven legal services to craft one.
We Can Help You to Deal with Non-Compete Agreements in Florida
The process of drafting an enforceable non-compete agreement in Florida may be complex and time-consuming. Hence, do not waste time with uncertainty.