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How do employers create enforceable non-compete agreements?

On Behalf of | Nov 27, 2023 | Employment Law |

Non-compete agreements have become more controversial in recent years. There are indications that there could be a ban at the federal level enacted in the next few years. For the time being, however, non-compete agreements are theoretically legal and enforceable in Florida

Employers who do not want workers to work for a direct competitor or start a competing business can have them sign a contract preventing them from doing so. Later, if the worker violates that agreement, the company can take that person to court to stop the competition or seek monetary compensation. 

What can a company do to help ensure a non-compete agreement is enforceable? 

The agreement must be reasonable

For the Florida civil courts to uphold a non-compete agreement, it needs to meet certain standards. The first is that the agreement must be necessary for the protection of the business. Forcing a short order cook to sign a non-compete agreement would probably not result in an enforceable contract because their skills and knowledge won’t directly harm the business if they get a job elsewhere. 

Secondly, the terms of the agreement must be reasonable. Typically, employers need to limit the geographic area where the agreement applies and also how long they can enforce the non-compete agreement. 

Finally, the worker must receive something of value. An offer of employment or a promotion would meet this requirement. So could a one-time bonus. Businesses will also need documentation affirming that the worker has violated the agreement if the company hopes to take the matter to court. 

Understanding the rules that govern non-compete agreements and other popular employment contract inclusions may help organizations reduce the risk involved in hiring new workers.