Articles Posted in Non-Compete Agreements

Section 542.335 of the Florida Statutes permits non-compete agreements arising from: a) the sale of a business, b) an employment, agency, or independent contractor relationship, c) a licensing relationship, or d) a partnership. Contracts that restrain one from exercising a lawful profession, trade, or business, and that do not fall within the exceptions of the…

Businesses in highly competitive industries often create and maintain highly confidential business information and trade secrets. Businesses spend substantial amounts of money curating this confidential information. To protect this investment, businesses must take steps to ensure the continued secrecy of its confidential information, such as limiting access and requiring employees with access to sign confidentiality…

Pursuant to Section 542.335, Florida Statutes, a non-compete agreement must be in a writing signed by the party against whom enforcement is sought. Businesses often enter agreements with their employees for specified period with an option to renew. Courts have found that written agreements can be extended beyond their expiration dates when the parties agree…

When a party to a non-compete agreement no longer provides services in that particular “line of business,” they may no longer have a legitimate business interest preventing the other party from competing. However, discontinuance from servicing a specific demographic of customers does not necessary constitute the fact that a party may no longer offer services…

When a business is purchased, often the former owner will enter into a separate employment agreement to provide continuity of service to the customers and a smooth transition from the former owner to the new one. Such agreements typically include a non-compete provision so that the former owner does not attempt to take the customers…

When a company purchases the assets of another company, the circumstances in which the sale takes place could impact the enforceability of the seller’s non-compete agreements with its employees. For example, a 100 percent stock purchase of an active corporation will generally entitle the buyer to enforce the seller’s non-compete agreements. However, if the buyer…

Businesses seeking to enforce their non-compete agreements often need to seek a temporary injunction to prevent irreparable harm. Non-compete law is unique because the moving party does not need to provide evidence quantifying the amount of possible damages in order to show irreparable harm. Under Florida law, the business instead needs to allege that immeasurable…

Businesses often execute non-compete agreements separate from but contemporaneously with an employment agreement. When the employment agreement contains an arbitration provision, but the non-compete agreement does not, parties can dispute whether the non-compete agreement is arbitrable. Further, it becomes more complicated if the non-compete agreement contains wording that suggests that disputes must be litigated in…

Florida and Maryland’s non-compete laws are protective of business interests in customer relationships and goodwill. Due to the advent of remote working capabilities, there are often cases when the non-compete laws of more than one state may be implicated. For example, a Florida employee may work in Florida for a company based in Maryland, and…

For a non-compete agreement to be enforceable, it must be founded on a legitimate business interest which justifies the need for the restraint on competition. A substantial relationship with customers is a common reason asserted to justify the non-compete, however, courts will often examine the exclusivity and nature of the relationship with the customer to…