BUSINESS & CORPORATE LAW ATTORNEY - BUSINESS & CORPORATE LAW LAWYER
A non-compete clause, also referred to as a covenant not to compete, is a term used in contract law whereby one party (usually an employee) agrees not to pursue a similar profession or trade in competition against another party (usually an employer). Based on matters of public policy, Florida courts will recognize and uphold non-compete clauses so long as the employer can prove: (1) the non-compete is reasonable in time, area, and line of business (2) a legitimate business interests exists that can justify the restrictive covenant and (3) the non-compete must be reasonably necessary to protect the legitimate business interests.
The decision to utilize a non-compete clause is premised on the concern that upon termination or resignation, an employee might seek to gain a competitive advantage by using confidential information about their former employer’s operations, trade secrets, or sensitive information such as customer lists and marketing plans.
When it comes to the enforcement of a non-compete agreement, courts will look to several factors. First and foremost, a non-compete agreement is not valid if it runs contrary to public policy. For instance, it would not be in the public’s best interest to allow parties to contractually limit a large county or municipality to only one family care physician. In addition, the party seeking to enforce the contract has the burden of proving that he or she is seeking to protect a legitimate business interest. Although confidential information may be a legitimate business interest that will support a covenant not to compete, information that is commonly known in the industry and is not unique to the allegedly injured party is not confidential and is not entitled to protection.
Finally, in determining whether the restraint is reasonably necessary to protect a legitimate business interest, courts will examine several factors including: (1) the scope of any geographic restraint; (2) the length of the restraint; and (3) the manner in which the restraint operates. If a court finds that a non-compete cause is unreasonable it has the power to grant only the relief that is reasonably necessary to protect a legitimate business interest.
At Rice, our attorneys examine the specifics of all business situations in order to draft a non-compete agreement that is effective, binding, and serves to protect the interests our clients have strived so hard to create. To discuss the specifics of your situation with our experienced business law attorneys, please call Rice at (386) 257-1222.
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