Depending on where you work in Florida, a non-compete agreement may inhibit your career advancement. The U.S. Government Accountability Office (GAO) estimates that 18% of workers are subject to noncompete agreements (NCAs). In addition, more than 90% of private employers require their salaried non-managers, managers, and executives to sign an NCA as a condition of employment.
But what is a non-compete agreement? These clauses in employment contracts prohibit employees from taking a job with a competitor or starting a competing business for a given period of time after leaving employment with their current employer. Typical NCAs also prohibit employees from revealing proprietary information or secrets to other parties during or after employment.
Florida law permits the enforcement of non-compete agreements “so long as such contracts are reasonable in time, area, and line of business.” The state statutes provide additional guidance as to what is reasonable.
It can be intimidating to be asked to sign a non-compete agreement when accepting a new job. Upon leaving a job, it can be confusing to understand your employment options in light of a non-compete agreement that you signed years ago. If you’re being accused of breaching a non-compete clause, you have reason to be concerned about how it could affect you and your livelihood.
Our experienced non-compete agreement lawyers with Cruz Law Firm, P.A., are here to help you understand how a proposed or executed non-compete agreement or employment contract clause affects you. We can evaluate the agreement, explain your legal options, and help you determine the best course of action. We can help you negotiate a proper NCA, or if a former employer is suing you, we will defend you.
At Cruz Law, we are dedicated to representing employees in matters involving unjust treatment in the workplace. With more than a decade in practice, we’ve become known across the Florida Panhandle as the leading law firm for employee rights and discrimination claims.
Let us put our experience to work for you. Contact us today for a close review of an NCA that impacts you.
Understanding Your Rights and Obligations Under a Non-Compete Agreement
Some people scoff at the idea of non-compete agreements and say they’d never be enforced. But this is absolutely incorrect. A signed non-compete agreement or a non-compete clause in an employment contract will be considered a binding legal agreement unless a court finds its requirements unreasonable.
If a worker violates a non-compete clause, the employer may sue the worker for breach of contract. The employer may also obtain a preliminary injunction ordering the worker to stop the conduct that allegedly violates the non-compete clause, such as working at their new job.
If the employer wins the lawsuit, they may obtain a permanent injunction ordering the worker to stop the conduct that violates the non-compete clause. They also may be awarded compensation from their former worker.
The U.S. Supreme Court has ruled that employers are allowed to apply reasonable restraints of trade under non-compete contracts where permitted. In United States v. Addyston Pipe & Steel Co., the High Court said employers “would naturally be reluctant” to train employees unless the employees were “able to bind themselves not to set up a rival business in the vicinity after learning the details and secrets of the business of their employers.”
Florida law says that an employer seeking to enforce a restrictive covenant (a non-compete agreement) must “prove the existence of one or more legitimate business interests justifying the restrictive covenant” and that “enforcing the restriction is reasonably necessary to protect the legitimate business interest or interests justifying the restriction.”
Legitimate business interests and their enforcement include not allowing an employee to leave and take with them:
- Trade secrets.
- Valuable confidential business or professional information that does not otherwise qualify as trade secrets.
- Substantial relationships with prospective or existing customers, patients, or clients.
- Goodwill associated with the business’s trade name, trademark, service mark, or “trade dress,” or within a specific geographic location or specific marketing or trade area.
- Extraordinary or specialized training.
Further, the duration and geographic scope of a non-compete agreement in Florida must be reasonable for it to be enforceable. The law provides presumptive parameters for the length of restraints that apply to various types of positions and whether the cessation of employment is connected to the sale of all or parts of the business. Geographic limitations vary according to the industry, length of employment, duties performed, and other issues related to the employer’s business interests.
Evaluating the Enforceability of Non-Compete Agreements
Non-compete agreements between employers and workers are traditionally subject to more exacting review than other contractual terms. This is because, among other concerns, they raise questions about unequal bargaining power between employers and workers. They also limit a worker’s ability to practice their trade.
Non-compete agreements are also seen as a means of defending the employer’s legitimate business interests. However, because of the limitations placed upon the worker, they are expected to be as narrow as possible. A non-compete agreement may be unenforceable if:
- The Agreement Has No Consideration – Generally, restrictive covenants are only enforceable if consideration, or something of value, is given in exchange for the promise made by the agreement, such as higher pay or additional benefits.
- The Period It Covers Is Too Long – In most cases, a court will consider a restriction against employment ranging from six months to two years to be reasonable.
- The Geographic Scope of the Agreement Is Too Large – The courts recognize that most natural new employment options for a worker are usually jobs in the same geographic area.
- The Same Non-Compete Agreement Is Used for Every Employee – Increasingly, non-compete clauses are being imposed even on low-skill and low-wage workers. Typically, only highly skilled workers have been subject to non-compete clauses.
Further, the U.S. Federal Trade Commission is considering a ban on non-compete agreements and is set to announce a decision in April 2024.
In its proposed rule change, the Federal Trade Commission says that non-compete clauses impair competition in labor markets by restricting a worker’s ability to change jobs. Further, where non-compete clauses are prevalent in a market, they materially reduce wages for workers — not only for workers who are subject to non-compete clauses but also for other workers in the labor market.
The proposed rule would, among other things, provide that it is an unfair method of competition for an employer:
- To enter into or attempt to enter into a non-compete clause with a worker;
- To maintain with a worker a non-compete clause; or,
- Under certain circumstances, to represent to a worker that the worker is subject to a non-compete clause.
Seek Legal Representation When Confronted With a Non-Compete Agreement
An employer may have legitimate reasons for asking employees to sign non-compete agreements, but employees have rights, too. They include the ability to advance your career as your knowledge, skills, and abilities grow and/or your needs and desires change.
If your current employer or a prospective employer asks you to sign a non-compete agreement, you should consult an employment law attorney. If you have been notified of a lawsuit alleging you have breached a non-compete agreement, you should speak to an experienced attorney right away.
In Florida, a non-compete agreement lawyer from Cruz Law in Tallahassee can help determine whether your employer’s non-compete agreement is lawful and fair. We can advise you and hear your personal concerns, then take a case to your employer for modifying or waiving a non-compete agreement as a term of your employment.
An attorney from our firm can lead you through how to get out of a non-compete agreement. First, we would ask for an explanation of the company’s reasons for having you sign a non-compete agreement. Any claim of protecting business interests or trade secrets should align with duties and responsibilities documented by a job description for your position. It may be that asking you to sign a non-compete agreement is standard practice, and your job does not actually require one. Some portions of the non-compete agreement may not hold up to scrutiny.
A different approach may satisfy your employer if specific issues are to be addressed. Suppose your employer is concerned about protecting trade secrets. In that case, they might agree to a stronger nondisclosure clause to prevent you from taking research with you if you leave instead of a broader non-compete restriction. Or, in another job, your employer may need a non-solicitation agreement that prevents you from contacting key clients if you leave the company.
If the employer refuses to change their requirements, and you still want the job, we would want to bargain for additional consideration, such as additional salary or perks, like more time off or a company car.
When helping you fight a lawsuit for violating a non-compete agreement, we would determine whether the agreement is likely to be enforceable and whether it applies to your specific actions or situation.
Once we have assessed the claim and developed an appropriate response, we will contact your previous employer to assure them that the steps you have taken to get on with your life are not a threat to them. If necessary and not an unreasonable burden on you, we might draft an agreement that commits you to certain measures. These could include not contacting certain clients, not working on certain projects for your new employer, and not encouraging former co-workers to apply to your new employer.
We would also contact your new employer to inform them about impending action against you and that we were representing you. Your new employer will appreciate your honesty and likely stand by you as you work things out. In some cases, they might help a potentially valuable employee with litigation.
Contact a Tallahassee Non-Compete Agreement Lawyer
The employment lawyers at Cruz Law are ready to stand up for your rights if your current or former employer uses a non-compete agreement to threaten your ability to hold a job or make a living. We have extensive experience handling legal matters involving employment law issues and the Equal Employment Opportunity Commission. Our experienced Tallahassee non-compete agreement attorneys can review your employment agreement and other documents and discuss your legal options.
At Cruz Law, our legal team is committed to providing each client with effective legal representation and personalized services, whether it requires negotiations or aggressive litigation to protect your rights. Our attorneys represent hard-working employees like you in Tallahassee, Jacksonville, and across the Florida Panhandle. Contact a Tallahassee non-compete agreement attorney with our law firm today.