Florida Statutes §542.335 governs the enforceability of restraints of trade or commerce in the Sunshine State. Accordingly, it is possible to insert a restrictive covenant within a contract in Florida, as long as it complies with the requirements determined by law.
Non-compete agreements and non-disclosure agreements are often used by employers in Florida to protect the best interest of companies. Although they may sound similar, they serve distinct purposes and are not necessarily attached.
In this article, you will discover the differences between non-compete agreements and non-disclosure agreements in Florida.
Non-Compete Agreement in Florida – Explaining the Concept
Typically used as a clause within an employment agreement, a non-compete requires an employee to refrain from using knowledge acquired on the job upon leaving the company for a pre-determined period.
Most employers use non-competes to prevent employees from using knowledge acquired at their cost to benefit other business efforts or competitors. Additionally, there are cases in which an employer will ask independent contractors, freelancers, and other independent professionals to sign a non-compete.
Although restrictive covenants are enforceable in Florida, they must meet the specific requirement to be considered valid in court. In this sense, a non-compete agreement must be reasonable.
Hence, the restriction period, the geographic scope, and the contract’s business line must be reasonable. Plus, a non-compete agreement must protect a legitimate business interest that justifies the utilization of a restrictive covenant.
As provided by Florida Statutes §542.335 (1)(b), the term “legitimate business interest” includes, but is not limited to trade secrets, valuable confidential business or professional information, substantial business relationships, or extraordinary or specialized training.
The term also encompasses customer, patient, or client goodwill associated with an ongoing business or professional practice, a specific geographic location, or a specific trade area.
Non-Disclosure Agreement in Florida – Explaining the Concept
Also known as “confidentiality agreements,” non-disclosure agreements are legally binding agreements in which an employer demands an employee never expose certain information obtained exclusively through such a company.
Usually, employers in Florida utilize non-disclosure agreements to protect and preserve the privacy of delicate information, such as trade secrets that give a company a competitive edge over other businesses.
In this context, a non-disclosure agreement may be used to protect several intangible assets within a company, including technology used, systems operated, proprietary information, unique manufacturing processes, etc.
Similar to non-competes, non-disclosure agreements may be used both with employees and independent professionals (e.g., contractors, freelancers) to preserve the confidentiality of data shared with them.
Equally, a non-disclosure agreement must observe the same principles of any enforceable restrictive covenant in Florida, including being reasonable in time, geographic area, and line of business and protecting a legitimate business interest.
As explicitly affirmed on Florida Statutes §542.335, “any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.”
Non-Compete Agreement vs Non-Disclosure in Florida – The Verdict
Ultimately, non-compete and non-disclosure agreements differ in their function and legal scope. While the first protects a company from unfair competition, the latter protects a company’s confidential information.
Although both must be reasonable in their scope, enforcing a non-disclosure is usually a far less demanding process than enforcing a non-compete.
Additionally, while a non-compete is often used as a one-way contract, a non-disclosure agreement permits further cooperation between the parties involved to preserve the confidentiality of sensitive information of both sides.
Restrictive Covenants in Florida – Work with an Expert Attorney
Although restrictive covenants are enforceable by Florida law, they require legal expertise to avoid unforeseen issues. Waste no time with uncertainty. If you want to draft a valid contract, call Attorney Romy B. Jurado today at (305) 921-0440 or send an email to Romy@jflawfirm.com.