All employers and employees are familiar with the non-compete agreement. The problem is that familiarity does not equate to clarity. Both sides can experience confusion when it comes to technicalities, especially when the contract attempts to limit where an employee can work after leaving their previous job. Legally, while these issues are common, not every non-compete will hold up in a Florida court.
What makes a non-compete enforceable?
Courts generally look at whether a non-compete preserves fairness for all parties involved. A company’s interest in protecting its business is natural, but it should not overshadow the interest of the employee who is starting over.
Common reasons a non-compete may be unenforceable
In certain cases, the agreement meets certain conditions that make it unenforceable. These reasons may not hold up in court if it:
- Lasts too long, which will prevent an employee from working in the same industry for years.
- Covers a geographic area that is too wide, making it impossible for the worker to find a job even if they are willing to relocate.
- Applies to roles or industries unrelated to the employee’s previous job.
- Fails to protect the employer’s core interest.
These are the reasons why both parties need to review the agreement thoroughly before signing.
Why employees and employers should review these contracts
Not all non-compete terms are valid just because they appear in an agreement. Currently, courts are striking down overly broad restrictions. Meanwhile, states like California, North Dakota and Oklahoma have banned non-competes entirely. The Federal Trade Commission (FTC) has moved to ban non-competes nationwide, but it is still not in full effect.
Once in effect, employers who want to protect their business should consider alternatives like confidentiality or non-solicitation clauses.
Taking the next step
If you are an employee being asked to sign a non-compete, or if you are an employer who needs to enforce one, consulting a lawyer should be the first step. A well-practiced attorney can review the terms in the agreement and represent you in case of a dispute.