Non Compete & Non Solicitation Agreements
Business owners in Florida need to understand non-compete agreements and non-solicitation agreements in their fullness. Both non-compete and non-solicitation agreements are restrictive covenants which involve limiting the behavior of former employees. Typically, these agreements will be clauses within a larger, comprehensive employment contract. But each of these agreements can also function alone and have its own contract. Florida business owners need to understand the complexity and implications of these agreements, as well as the principles which guide how these agreements are interpreted and enforced by courts.
Essential Points of Non-Compete Agreements
A non-compete agreement is an agreement which prevents a former employee from either starting his or her own business in the same industry, owning an interest in or working for a competitor business in the same industry. Non-compete agreements are not about giving employers an unfair advantage; quite the opposite, they are about ensuring that a former employer isn’t retaliated against or abused. In many cases, an employee will receive specialized knowledge of a certain industry when they work for a company; they might also gain access to trade secrets, confidential information, etc. A non-compete agreement forbids a former employee from taking his or her newly acquired specialized knowledge and using it within the same industry, to the detriment of the old employer.
Essential Points of Non-Solicitation Agreements
A non-solicitation agreement also restricts the behavior of a former employee, but in a different way. Under a non-solicitation agreement, a former employee is prevented from directly asking his or her clients to follow him or her. Let’s consider an example: a financial consultant voluntarily resigns his employment with a consulting firm. Prior to his employment, this financial consultant had no clients of his own. Under a non-solicitation agreement, this consultant would be prevented from soliciting business from the clients with whom he conducted business during his employment with the consulting firm.
In some cases, a non-solicitation agreement may prevent a former employee from asking other employees to follow him or her after termination or resignation. Again, as with non-compete agreements, the purpose here is to prevent abuse of the employer.
Agreements Governed by the Principle of Reasonableness
As a business owner, it is imperative that you have a clear understanding of the purposes of these contractual tools, as well as the ways in which these agreements are interpreted by courts. In some states, such as California, non-compete and non-solicitation agreements are essentially unenforced by courts, and the reason is because California wishes to promote competition as much as possible. In the State of Florida, these restrictive covenants are permissible, but they are still governed by a principle of reasonableness. This means that agreements which are overly harsh or patently unfair against former employees will likely be struck down upon judicial scrutiny. What constitutes reasonableness? There is no way to tell without looking at the facts and circumstances of a particular case. And that is precisely where the Trembly Law Firm can help.
Reach Out to a Top Miami Law Firm
The lawyers at the Trembly Law Firm can help you as you develop restrictive covenants so as to better protect your business. We can help you understand what reasonableness looks like in a given context. When it comes to non-compete and non-solicitation agreements, you should always err on the side of caution. This means being sure to obtain adequate counsel prior to drafting your agreement language. Our experienced attorneys have considerable experience in this area and are available to provide immediate assistance. Give us a call today for more information.
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