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Wednesday, Mar 22, 2017

Non-compete agreements must have legitimate business interests

Editor’s Note: Shaina Thorpe is a Florida Bar board-certified specialist in labor and employment law. She practices at Thorpe & Thorpe, P.A., in Tampa. In today’s Legal Ease column, Thorpe provides information on non-compete agreements.

Q: Can my former employer really enforce a non-compete agreement?

Answer: Non-compete agreements are enforceable in Florida (unlike in other states like California). However, to be enforceable, a non-compete agreement must comply with the law.

First, the non-compete agreement must be in writing and signed by the employee.

Second, because a non-compete is a contract, it must be supported by consideration, which is a legal way of saying that the employer has to give the employee something in exchange for the employee’s agreement to the non-compete.

Sometimes, employers will say that if the employee does not sign the non-compete, the employee will not have a job anymore. Basically, the employer is “giving” the employee a job, or allowing the employee to continue his or her job, in exchange for the non-compete agreement.

Third, non-compete agreements must also be supported by what the law calls a legitimate business interest. This means that the employer must have a valid reason for prohibiting the employee from competing.

The legitimate business interest could be protecting confidential business information or client lists, which the employee would only have access to through the employer. A legitimate business interest could also arise when an employer provides an employee with specialized training or pays for an employee’s job-related education or certification.

Assuming the non-compete is in writing, was signed by the employee, and is supported by both consideration and a legitimate business interest, the next issue is whether the restrictions on the competition are reasonably related to that legitimate business interest.

The law says that non-compete agreements that restrict the employee for less than six months post-employment are presumed reasonable and that agreements longer than two years are presumed unreasonable.

The law also requires the geographic restrictions to be reasonably related to the legitimate business interest. For example, if the employer has a single location in Pinellas County, with customers who are primarily located in Pinellas County, it may not be reasonable for the restriction to prohibit employment in Miami-Dade, Broward and Palm Beach counties.

However, each case is unique, and the reasonableness of restrictions can vary.

If a court is asked to enforce a non-compete agreement, it is important to know that the court has the authority to “blue pencil” the agreement. This means that the court can reduce the time limitations or the geographic restrictions in the agreement if the restrictions are too broad.

However, by law, the court cannot consider the economic hardship that enforcement of the agreement may cause to the employee.

On a final note, The Florida Bar has taken the position that lawyers are not subject to non-compete agreements because the citizens of Florida have the right to representation by the lawyer of their choice. So, if you have questions about non-compete agreements or other legal matters, know that you can choose any attorney licensed in Florida to help you.

The information provided in this column is for informational purposes only and should not be considered legal advice. Shaina Thorpe can be reached through the Hillsborough County Bar Association’s Lawyer Referral Service at (813) 221-7780.

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