Answers To Your Questions Regarding Restrictive Covenant Agreements
Approximately 20% of employees in the United States are bound by noncompete agreements in their workplaces. These “restrictive covenant” agreements, also known as noncompete, non-solicitation and non-disclosure agreements, may limit employees from engaging in business activities and customer contact that compete with their employer’s interests after leaving the company. This applies to various roles a former employee may undertake including employee, independent contractor, owner, part owner, and investor. A new federal rule expected to be effective September 4, 2024, will ban most non-compete clauses for workers in the U.S., unless the rule is delayed in the courts.
Additionally, you may also be asked to agree to restrictions preventing the solicitation of customers or employees after you leave, and the use of disclosure of trade secrets, confidential information and intellectual property.
Noncompete laws vary by state. These laws will be preempted by a new federal rule expected to be effective September 4, 2024, that will ban most non-compete clauses for workers in the U.S., unless the rule is delayed in the courts.
Some states limit or don’t allow non-compete clauses due to concerns about hindering business growth. In Florida, noncompete, non-solicitation, and non-disclosure restrictive covenants can be enforced if the claim meets the statutory criteria. Employees bound by these agreements may question whether the restrictions are applicable if they move to another county or state.
If you are a Florida employer, employee or job applicant, and you have inquiries or concerns regarding restrictive covenant agreements, feel free to reach out to Brick Business Law, P.A. Our legal team has over three decades of experience in all issues of employment law, and we can provide guidance on creating effective restrictive covenant agreements to protect a business or offer insights into your rights.
Restrictive Covenant Agreements In Florida
Florida’s Statutes (Section 542.335) enforce contracts that restrict competition during or after the term of restrictive covenants. To pass legal scrutiny, these contracts must meet the criteria of reasonableness in terms of time, area and line of business. Overall, a restrictive covenant agreement must safeguard a legitimate business interest and be both reasonable and practical in scope.
Considering geographical factors, an employee’s relocation, or a delay before entering a competitive field can impact the enforceability of a restrictive covenant agreement. Florida employment law statutes impose limits on the duration of such agreements. For employees leaving a company, a restrictive agreement is presumed reasonable for up to six months and unreasonable beyond two years. The reach of modern businesses, facilitated by the internet and social media, has expanded nationwide, sometimes transcending state boundaries. To enforce a restrictive covenant agreement in another state, pursuing legal action through the courts is necessary but can be time-consuming and costly.
In a scenario where an employee leaves a company in Tampa to work for a competitor in Miami, the enforceability of the noncompete agreement would rely on establishing legitimate business interests in Miami or areas outside of Tampa, and whether the new federal rule takes effect on September 4, 2024.
Navigating restrictive covenant/noncompete agreements requires careful consideration of both employer and employee interests and a detailed fact-based assessment, and consideration of existing laws. Seeking legal advice can ensure compliance with relevant laws and protect the rights of all parties involved.
Contact An Employment Law Attorney Today
If you’re an employer considering a first or new restrictive covenant agreement, or an employee who wants to know their options after signing one and moving on to a new job or career, contact Brick Business Law, P.A. You can call us at 888-708-4250 or email us using this brief online form.