A “non-compete clause” or “non-compete covenant” is a contractual agreement an employer may require its employee to sign that restrains that employee from exercising a lawful profession, trade, or business of any kind in the future.1
Generally, non-compete covenants are enforceable as long as they are reasonably necessary in scope and duration to protect the legitimate business interests justifying the covenant.2 Under Section 542.335, Florida Statutes, it provides that a court shall presume reasonable in time any restraint 6 months or less in duration and shall presume unreasonable in time any restraint more than 2 years in duration.3 Any covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.4
“Business Owners Should Be Cautious About Hiring Individuals Subject To Non-Compete Covenants.”
The importance of a well-drafted and legally compliant non-compete covenant arises when the employee subject to the agreement leaves his or her place of work and attempts to work for a new employer in a similar business that directly violates the terms of the non-compete covenant. Under Florida law, a former employer may sue its former employee for a breach of a non-compete covenant and its former employee’s new employer for tortious interference with the former employee’s non-compete obligations.5 For the new employer to be liable, it must have knowledge of the contractual relationship between its new employee and his or her former employer.6
In Aerotek, Inc. v. Zahn,7 Aerotek, a Florida company, brought suit against two former employees and their new employer for interference with a non-compete agreement signed by the former employees. After the former employees were hired, Aerotek sent a letter to their new employer informing it of their non-compete agreements.8 The new employer responded to this letter stating that it is not bound by the non-compete agreements because it was not a party to the obligations.9 On appeal, the 11th Circuit Court concluded that the new employer was subject to the terms of the non-compete agreements because it had knowledge of the agreements and therefore it was liable for tortious interference with Aerotek’s non-compete agreements.10 The Court further emphasized that Florida law recognizes a continuing violation for the breach, meaning that each day that the former employees worked for the new employer and each day that the new employer employed the former employees constitutes a separate breach.
In sum, it is wise for an individual to seek legal counsel to determine whether signing a non-compete covenant is in his or her best interest. Further, an individual that has signed a non-compete covenant should seek the assistance of counsel to determine the effectiveness and enforceability of that non-compete covenant. Similarly, an employer should conduct due diligence in determining whether a potential candidate is bound by a non-compete agreement. If a candidate or employee is subject to a non-compete agreement the new employer should seek counsel to determine its applicability because hiring that candidate or continuing to employ that employee may lead to future legal disputes and liability.
At The Law Office of Knellinger & Associates in Gainesville, Florida, our business law and civil litigation lawyers understand the importance of drafting and enforcing a non-compete agreement to protect your business. By recognizing your immediate and future needs, our lawyers can prepare a non-compete agreement for you. Whether you are a current or former employer or employee, our seasoned attorneys understand the importance of understanding your rights. Let us have an opportunity to provide you with legal guidance in the area of non-compete agreements.
1. Fla. Stat. § 542.33 (2015).
2. Fla. Stat. § 542.335 (2015).
5. See Int’l Sales & Serv., Inc. v. Austral Insulated Prods., Inc., 262 F.3d 1152 (11th Cir. 2001).
7. 2014 U.S. Dist. LEXIS 82289 (M.D. Fla. 2014).
8. Id. 1-2.
10. Aerotek, Inc. v. Zahn, 2015 U.S. App. Lexis 15054 (11th Cir. 2015).
The Law Office of Knellinger & Associates provides legal advice and representation for individuals, entrepreneurs, and business owners in Gainesville, Florida, and communities throughout north central Florida, including cities such as Ocala, Starke, Palatka, Lake City, Middleburg, Trenton, Bronson, Lake Butler, Cross City, Williston, Chiefland, Alachua, Jasper, Live Oak, and Jacksonville, Florida.
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