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Understanding non-compete agreement enforcement

by | Jul 17, 2019 | Business Litigation |

Businesses in Daytona Beach understand the importance of their proprietary information. It is for this reason that concerns are often raised when an employee leaves a company. Many may view these fears to be justified, and thus warrant requiring staff members to sign non-compete agreements. Such an agreement typically seeks to limit what a person can do when pursuing opportunities similar to the work they provide while in a company’s employ. The question is whether or not such agreements are enforceable. 

Section 542.335 of Florida’s state statutes says any covenants that restrict or prohibit an employee from competing with a former employer are enforceable provided that they are reasonable in terms of their time, area and line of business. Often, courts have interpreted “reasonable” to extend only to the sharing of vital business information and not restricting an employee from working in the same industry or for a particular company within that industry (agreements deemed to be lawful that restrict employment usually only apply to a company’s immediate geographic area). Indeed, Florida’s law goes on to specify that restrictive covenants to employment only apply when there is a legitimate fear of a negative impact on a company’s business interests. Those interests are defined as: 

  • Trade secrets 
  • Valuable confidential business and/or professional information
  • Relationships with current and potential clients and customers
  • Client goodwill
  • Trademarked practices
  • Extraordinary or specialized training

It is in defining these interests that a distinction is often made between non-compete agreements and non-disclosure agreements. points out that non-compete agreements address direct competition through work in a role or for a different employer, while non-disclosure agreements refer to the unauthorized sharing of vital business information. The details of Florida’s law imply that the state is more likely to validate and enforce the latter.