Businesses must trust their key employees with sensitive information, such as customer lists, pricing information, marketing plans, and trade secrets. Employers may ask workers to enter various kinds of restrictive covenants designed to protect the employer after they disclose critical competitive information to workers, such as non-compete and non-solicitation agreements. But how do non-competes and non-solicitation agreements differ from one another in Florida?
The Basics of Non-Compete and Non-Solicitation Agreements
A non-compete agreement restricts an employee from working for a competitor of the employer or starting a competing enterprise during the employee’s employment and usually for a specific period after their employment ends. Employers in industries such as technology and financial services frequently include non-compete provisions in employment agreements. In Florida, courts may enforce non-compete agreements if they find them reasonable to a worker with respect to temporal, geographic, and industry scope.
A non-solicitation agreement prohibits an employee from soliciting their employer’s customers and other employees to buy from or work for a competing business. Non-solicitation agreements last during the employee’s employment and for a specific period after they leave the employer. Employers frequently insist on non-solicitation agreements for workers in client-facing roles, as those workers can develop personal relationships with customers that they can leverage to take clients with them to a competing business.
Differences Between the Two Agreements
Some of the primary differences between non-compete and non-solicitation agreements include:
Scope of Restrictions
Non-compete agreements seek to restrict an employee’s other work or new employment after leaving the company, whereas a non-solicitation agreement allows an employee to work for another company, including a competitor, but prohibits them from poaching clients or co-workers.
Burden on Employee
A non-compete can impose a substantial burden on an employee, as they lose the ability to work in their chosen industry or trade or to take a job within their work experience. However, employees can have an easier time complying with a non-solicitation agreement, as they only must refrain from bringing a customer or employee of the protected company to a competitor’s business.
Enforceability
Florida courts may review non-compete agreements more closely due to their ability to restrain a worker’s right to practice their trade, whereas businesses may have an easier time enforcing non-solicitation agreements.
Enforcement Under Florida Law
Florida law allows businesses to create contracts that restrict or prohibit competition so long as such contracts have a reasonable scope of time, area, and line of business. However, a company seeking to enforce a restrictive covenant must establish one or more legitimate business interests that justify the covenant, such as:
- Trade secrets
- Valuable confidential or professional information
- Substantial relationships with specific prospective or existing customers
- Customer goodwill associated with an ongoing business
- Extraordinary or specialized training
Practical Considerations for Employers
Practical considerations for employers to consider when negotiating non-compete or non-solicitation agreements with current or prospective employees include:
- Deciding Which Type to Choose – Although some employers may include both types of agreements in a restrictive covenant agreement, a business may only require the protection of a non-solicitation agreement.
- Determining Reasonable Scope – A reasonable duration for an agreement may depend on the importance of the employee’s role in the company. The reasonableness of the geographic scope will depend on the size of the company’s territory.
- Tailoring to the Employee’s Role – Employers may find it easier to enforce non-compete agreements restricted to the duties or types of work the employee performed for the company.
Contact an Employment Law Attorney Today
Restrictive covenants like non-compete or non-solicitation agreements can protect your company’s competitive advantage and financial interests. Contact Brick Business Law, P.A. today for a free, confidential consultation with an employment lawyer to learn more about the differences between non-compete and non-solicitation agreements and how they work under Florida law.
