Non-Compete Agreements 101

Throughout the lifetime of a business, employees may come and go, taking their training, the business’s clients, and even company trade secrets with them. Non-Compete Agreements ensure that this valuable and confidential knowledge remains out of the hands of competitors, so that your enterprise will continue to maintain its crucial edge.

Here is what you need to know about Non-Compete Agreements and how Jurado & Farshchian, P.L. can protect your business with these important legal documents.

What Do Non-Compete Agreements Do?
In simple terms, a Non-Compete Agreement (NDA) is designed to protect your business by preventing personnel from using what they learned during their employment to form a rival company and/or provide an edge to a competitor. They should be signed by all employees, and apply during the duration of employment and for some time afterward.

What Do Non-Compete Agreements Cover?
Florida generally prohibits contracts that restrain trade and commerce between parties. One of the key requirements for an NDA to be valid and legally enforceable is that it must serve to protect a “legitimate business interest.” Under State law, this includes:

Trade Secrets — Any strategy, technique, process, design, or innovation that is critical to your business’ economic advantage that is not generally known or ascertainable by competitors.
Confidential Information — Any information related to the business that is not a trade secret but is nonetheless sensitive, such as a client database, internal reports and financial statements, inventory ledgers, and so on.
Client Relationships and Goodwill — Any business relationship or contract you have with existing clients as well as prospective clients.
Specialized Training — Any substantial abilities and skills beyond the industry standard that were provided at the expense of the business.
You have a right to prevent all of the foregoing from being used against the interests of your business, provided they can reasonably be established as pertinent to your business. Our attorneys can assist you in determining what interests can be protected in your NDA and how it can be written carefully to ensure an airtight but legally valid document.

What is the Scope?
For an NDA to be enforceable, it must also be reasonable in the time, geographic area, and line of business to which it applies. For example, you cannot restrict the other party from competing in the same line of business forever, nor can you restrict them for an unreasonably long time, such as ten years (though the length of time that is reasonable is also dependent on the type of industry).

By the same token, it may be unreasonable to prevent competition throughout the entire State of Florida, or to restrict working in a different industry. Not only would such unreasonable terms place an undue burden on the other party, but it would be difficult to argue that these restrictions would protect a legitimate business interest. That is why our attorneys utilize the legal language necessary for balancing your business interests with the standards required under Florida law.