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Understanding noncompete agreements

On Behalf of | Nov 3, 2017 | Contract Disputes

When you own a business, it is understandable to not want too much competition taking your customers away from you. At the Law Offices of Levi Williams, P.A., we also understand how frustrating it would be – not to mention the legal ramifications – if a former employee used your trade secrets or company information to start a similar business. You and other Florida business owners might use a noncompete clause to prevent situations like these.

However, it is important to know what goes into creating a fair and reasonable noncompete clause. You most likely understand that many of your employees are not going to work for you for a lifetime. After leaving your company, they might go on to work in the same field for a competitor or start a business of their own. The purpose of noncompete clauses, according to The Balance, is to prevent unfair competition by your former workers, who may have an in-depth knowledge of your company’s operations, clientele and financial information.

A noncompete clause that can be upheld in court should be fair and reasonable to your employees. For example, you could state that your employees not work in a similar field or start a similar company within 10 miles of your business for three years after leaving your employ. If your employee leaves to work in the same field or to start his or her own company in a different city or state, however, he or she should be free to do so.

Noncompete clauses that do not place undue restrictions on your former employees’ ability to find work are the most likely to be enforceable in court. You may learn more about formal agreements by visiting our contract law page.