Is My Employer's Non-Compete Agreement Valid?
Published on April 24, 2016
Is my employer's non compete agreement valid? Orlando employment law attorney Scott Adams explains what non compete and non-solicitation agreements are. He also explains the criteria these agreements need to meet in order to be considered valid in Florida. Contact us today at 407-835-8968.
Is My Employer’s Non-Compete Agreement Valid?
It depends. And what does it depend upon? It depends upon many different factors. First, you have to look at what actually is a non-compete agreement. Let’s define what it means. In the employment context, what we typically see, are three types of agreements:
- First, what a non-compete does is prevent an individual from soliciting an employer’s clients after the termination of the employment with that employer. Sometimes that is referred to as a non-solicitation agreement.
- Other times, we see agreements that prevent an employee from soliciting prior employees to leave the job with the employer to come work with them. That is also sometimes referred to as non-solicitation.
- And the final one is what’s typically referred to as the non-compete portion of that, where the agreement prevents, during the time-frame of the employment, as well as for a specified period of time after the employment ends, the employee from working for a subsequent employer or another employer that competes directly with the current employer with whom you have the contract with.
So those are the three types of agreements that are typically out there and that you see. Are these three types of agreements valid in Florida? Specifically, they are covered under a statute: Florida statute 542.335 and that governs what’s referred to as non-compete agreements. The language in the statute calls them “restrictive covenants” they are valid, but to be valid, they have to meet four criteria
- First, they must be in writing.
- Second, they must protect a legitimate business interest.
- Third, they must be reasonable in time frame.
- Lastly, they must also be reasonable in geographical scope. For example, for an employment context, for an employee leaving their employment, six months is presumed to be reasonable, anything over two years is presumed to be unreasonable
As far as geographical scope, it’s kind of common sense. If someone is working in Orlando, lets say, Orange County, Florida, and the competing business works in California, and there is no relation between the two, then obviously a non-compete agreement in that context would be invalid if it sought to prevent the employee from working across the nation. The remedy in that situation though is not to nullify the non-compete agreement, but to simply reduce the geographical scope to the reasonableness of it.
Another way that employees can defeat a non-compete agreement, is to present the argument that there was a material breach of the employment arrangement prior to the time frame that the non-compete is sought to be invoked by the employer. What do I mean by that? Let’s say hypothetically an employer and employee have a contract that outlines a compensation package for salesmen and during the time frame of the employment, the employee does not receive the compensation that is meant to be paid under that compensation agreement. The employee can then argue that is a material breach, and by that material breach, the employer has now nullified the non-compete agreement. That’s a specific defense, it has to be proven by the employee, in a non-compete type of case.
If you believe that you have a non-compete agreement that is invalid, or that should not be enforceable, I suggest that you contact an Orlando employment attorney at LaBar Adams immediately.