Intellectual property is a heated debate in states that enforce non-compete agreements. Under Florida law, companies can enforce non-compete agreements as long as they are reasonable.
Factors that determine whether a non-compete agreement is reasonable include timeliness, geographic area, and the level of protection required for a business’ legitimate interests.
Non-compete agreements exist so that a company’s intellectual property stays with the company even when an employee leaves. Most states allow non-compete agreements to be made, but California is an exception. They do not allow them except for particular circumstances.
The court often considers a restriction of two years and primary areas where the company does business when deciding to enforce or not enforce a non-compete agreement. When an agreement is too broad (often designed to protect an employer’s best interest to the fullest), the court actually has the authority to modify the agreement so that it is more reasonable.
Non-compete agreements act as a great form of protection for businesses, but employees generally don’t like signing them because it limits their ability to move from one job to the next.
When Can the State Enforce an Agreement?
The enforcement of a non-compete agreement typically comes down to whether an employer has a legitimate interest that can be protected.
If a current or former employee uses that interest in such a way to create competition for the business, then the agreement will likely be enforced. An example would be if an employee made a copy of a company’s list of clients and then used that list to start a new business and potentially steal clients.
Non-compete agreements can also be enforced if an employer can prove that an employee used secrets, valuable information, or specialized training for their own benefit outside the company.
Why Do Businesses Create Non-Compete Agreements?
The financial investment required to start a business is usually quite high. There is also a lot of time involved and through experience you learn valuable lessons unique to your industry. When you grow you naturally have to train others and reveal these secrets so they can perform at their best. This requires trust from a business owner and while trust is a good thing, it doesn’t protect you.
Non-compete agreements are your form of protection. Employees are often given access to confidential information and one business can’t afford to see a competitor benefit from all their hard work. If you wish to protect your intellectual property from competitors, consider having employees sign non-compete agreements.
When an employee agrees to sign a non-compete agreement, they agree not to disclose confidential information that was learned from a previous job. Some agreements require employees to avoid working for competitors for a certain number of years. The most common length of time is 5 years.
Naturally you don’t want to scare employees by asking them to sign such agreements, but as a business owner you can’t afford to train an employee and teach them your secrets only to watch them leave and take that valuable information to a competitor. Learn more about non-competes right here.
Employees bounce from one job to the next all the time, but if you wish to retain employees and keep your private information in-house, consider speaking with a business attorney with experience in drafting non-compete agreements.