Protecting Your Business Interests with Non-Compete Agreements
A non-compete agreement is a type of restrictive covenant that protects employers from employees leaving and setting up a competing business. For example, if you have a medical office that provides a service like radiology, dentistry, or optometry, you might want a non-compete agreement from your partners or employees. This agreement would protect your business from your head optometrist quitting, open his or her own eye clinic across the street, and taking many of your patients
While non-competes are common in the medical industry and a variety of other businesses and industries, not all of these agreements are enforceable under Florida contract law and they should be carefully analyzed and drafted by a Florida business lawyer. Restrictive covenants, such as non-compete agreements, have to meet certain requirements to be considered enforceable, including:
• must protect a legitimate competitive interest of the business;
• must cover both a reasonable geographic area; and
• must be limited to a reasonable time period.
Balancing Protecting Consumers with Protecting Businesses
Competition is considered to be healthy and in the best interest of the consumer, lowering prices and sparking innovation. For that reason, courts usually don't enforce excessively restrictive agreements.
The specifics of meeting the above and other requirements vary from state to state, but, generally, courts consider a non-compete agreement reasonable if it doesn't overreach in terms of geographic area or time period. The more specific and less broad a restrictive covenant is, the more likely it is that the court will consider it reasonable. Smaller geographical areas are typically preferred, and it's best to focus on the area where your business draws the majority of its clientele. As for time period restrictions, six months to two years may be considered a reasonable time frame in most cases. It is also important to be specific about the type of work your employee can't do after leaving your employ.
For example, let's say you are hiring several new doctors to work in your vascular surgery center located in only two counties. A non-compete that says they can't work as surgeons anywhere in Florida for two years after leaving your clinic would probably be too broad. On the other hand, an agreement that specifies that the new doctors cannot perform angioplasties in the Port St. Lucie area for two years after leaving your clinic would be more reasonable and more likely to be considered enforceable by the court.
These are general considerations, and sometimes it can be difficult to balance making an agreement strict enough to protect your business but reasonable enough for the court to enforce it. Keep in mind that the particulars of your business needs should be examined by a Florida business lawyer who is experienced with Florida contract law and the drafting and interpretation of non-compete agreements.
Remedies for Breach Of Non-Compete Agreements
If you've had an employee sign a non-compete agreement and you believe he or she has breached it by working competitively, you can ask the court to issue an injunction. In this case, you will have to prove that your agreement meets the needed requirements to be considered enforceable, so safeguarding that your agreement is reasonable before asking employees to sign it is essential.
ABOUT THE AUTHOR: Nico Apfelbaum
Nico Apfelbaum, Esq. is the managing attorney of Apfelbaum Law, a Florida law firm serving Port St. Lucie, Stuart, the Treasure Coast and assisting clients with matters throughout Florida. Apfelbaum Law provides a wide variety of legal services, including, family law, divorces, business and contract transactions and litigation, immigration, wills and estate planning, probate law, and real estate law. The attorneys of Apfelbaum Law will answer your questions, explain your options, and provide you with the tools and resources you need to make an informed decision.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.