Every business has proprietary information it generates and uses to maintain a competitive edge. Certain employees may need to know this information to perform effectively for your company. How do you prevent these employees from taking your trade secrets and inside information to a competitor or launching their own business across the street?
A noncompete agreement is a contract that restricts a party, usually an employee, from competing with another party, usually an employer, after termination, resignation, or a business sale. This type of agreement serves as protection for a business owner who wants to limit potential competition by preventing someone from working for a competitor, starting his or her own business, and exploiting trade secrets, skills, and knowledge.
Florida Statutes § 542.335 states that noncompete contracts are valid as long as the following criteria are met:
This is where things can get tricky because enforcement of a noncompete often depends on what constitutes a “legitimate business interest.” The statute includes the following examples:
Even if a noncompete agreement meets all of the criteria above and a legitimate business interest has been established, the court will ultimately decide if the noncompete agreement is enforceable based on circumstances specific to your case. Whether you’re drafting a noncompete as a business owner or you’re being asked to sign a noncompete as an employee, it’s important to have the agreement reviewed by an attorney first to ensure clarity and protect your interests.
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