Articles

I was asked to sign a noncompete agreement. What is my risk?

Response from John Jorgensen, Esq.: 

  Noncompete agreements have long been enforceable in Florida. Although there have been a number of modifications to the statute authorizing covenants not to compete, employers still can successfully limit competition from their former employees or independent contractors through noncompete agreements.

  Covenants not to compete must be in writing and signed by the person against whom enforcement is sought. Noncompete agreements are enforced by injunction, both preliminary and permanent. An employer must prove the existence of one or more legitimate business interests justifying the restrictive covenants. Such legitimate business interests include but are not limited to:

1. Trade secrets 
2. Valuable business or professional information 
3.Substantial relationships with specific prospective or existing customers, patients or clients 
4. Certain types of customer, patient or client goodwill associated with the business

  The statute listing the requirements of covenants not to compete and the methods by which they may be enforced has become more complex over the years and somewhat more employee friendly. The courts now balance the legitimate business interests of the employer with claims by the employee that the restrictive covenant is overbroad, overlong or otherwise not reasonably necessary to protect the employer's business. In balancing these interests, a court may modify the duration and geographic scope of a covenant not to compete.

  Despite the amendments to the statute governing noncompete agreements, such agreements remain a powerful tool for employers to protect themselves and limit competition from former employees and independent contractors. On the other hand, restrictive covenants continue to be a burden to employees who are required to execute them as a condition of their employment. If you are presented with a noncompete agreement, you should review it carefully and think twice before signing it. When you leave the employ of that business, your employer may file a lawsuit against you and a court injunction could seriously affect your livelihood.