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Can I Be Sued for Breach of A Non-Compete I Signed?

Orlando Non-Compete Attorney

Many employers these days require that officers and managers sign a non-compete agreement, a non-disclosure agreement and sometimes a non-solicitation agreement as well, before starting a new job. As an example of a non-compete agreement, a company could require that during employment and for two years afterward, the employee may not work for another competing employer in the same or similar industry within a 50 mile radius of the office in which the employee worked. Employers like non-compete agreements and non-disclosure agreements because they can “lock up” and silence key talent and restrict these key employees from working for a competitor. From the employee side, many complain to a non-compete attorney that the agreement is overly broad or works an extreme hardship on the employee and his or her ability to obtain work in their area of expertise in the same area they live.

Florida Law on Non-Compete Agreements

Florida has a statute that governs non-compete agreements. Florida Statutes section 542.335, which is a “business friendly” law. Orlando non-compete lawyers will tell you that the agreements must be in writing and signed by the person or entity against which the agreement would be enforced. So if you’re going to use non-competes, it’s important to meet with your lawyer even if it’s not so good, section 542.335 not only allows the court to re-draft the agreement, it requires the court to re-draft the non–compete to make it enforceable. Sect. 542.335(1)(c). This is known as “blue penciling” when the court can re-write the agreement that you paid your lawyer to write for you.

Requirements for a Good Non-Compete Agreement

But before we get there, let’s look at how a good non–compete agreement. First, the agreement must be in writing and it must be signed. Second, the non-compete must be:

reasonable in time – It cannot be overly long;
reasonable in area—It cannot be overly broad and cover too much areas; and
reasonable in line of business—It must be for a business in the same as or very similar to the business the employee worked for.

Once you get past that hurdle, a good non–compete lawyer will make sure the client has a legitimate business interest to protect. Most legitimate business interests are listed in section 542.335, but the statute is not the exclusive, exhaustive list, others may be proffered and proved up as well, but those identified in the statute are:

Trade secrets—The business must strictly enforce security/secrecy guidelines to obtain protection for a trade secret
Valuable confidential business or professional information—Allows protection for confidential information that for whatever reason would not qualify as a trade secret;
Substantial relationships with specific customers, patients, or clients—You can protect a confidential, hard to otherwise obtain customer/client list, not a listing from the Yellow Pages;
Customer, patient, or client goodwill—This section is typically used by franchise companies seeking to enforce their rights, and require that the business show that the goodwill is related to:

An ongoing business that uses a trade name, trademark, service mark,
A specific geographic area; or
A specific marketing or trade area.

Extraordinary or specialized training—This means more like rocket engineer training, not training for flipping burgers. The more difficult cases are those in between, so it’s good to have a detailed description of the training so your non-compete attorney can look it over.

All non-compete agreements must be supported by one of the above legitimate business interests, otherwise they are void and unenforceable, which of course assumes that the court cannot re-draft the non–compete to make it reasonable and enforceable.

How Long Is the Non-Compete-Agreement Enforceable?

The next step for a good non-compete attorney in Orlando would be to limit the time period for which the non-compete would be enforceable to a reasonable time period, some of which are given in the non-compete law itself:

6 Months to 2 Years—“Regular” employee/executive leaves the company.
1 Year to 3 Years—A former franchisee, distributor or dealer, etc. stops doing business;
3 Years to 7 Years—The seller of a business or professional practice
5 Years to 10 Years—The owner seeks protection for trade secrets

Assuming the above requirements are met in creating the non-compete agreement, it may be used as an exhibit to a complaint seeking temporary and permanent injunctions and money damages. If one party breaches the contract, irreparable harm is presumed in the non-compete litigation, which makes granting an injunction a bit easier to prove up.

Finally, remember that the statute allows the court to award prevailing party attorney’s fees to the party who successfully enforces a non-compete or who successfully challenges the non-compete, and invalidates any contractual terms that would prohibit a litigant from recovering attorney’s fees. So even though he court can re-draft the non-compete later, it is more cost effective to have your Orlando non-compete lawyer draft up a good agreement from the start to hopefully avoid litigation.

Consult With an Experienced Non-Compete-Attorney in Orlando

If you have questions about a non-compete agreement, then you should consult with Orlando attorney Richard P. Spence to schedule a FREE confidential consultation.