Sunday, June 25, 2017 01:55

Non-Compete Agreements – Part II

6. What is considered a reasonable geographic scope?

Reasonable geographic scope is often dependent on various other factors and their relationship to each other. Some of these factors are: geographic scope, time, nature of the restrictions, location of customers, and anything of value promised when making the agreement, all viewed in relationship to one another. Moreover, the type of business restricted, the geographic areas worked by the employee during the term of employment can all play into the balancing test. Where a non-compete covenant does not contain a geographic limitation, the court may be permitted to supply a reasonable geographic scope.

7. What is considered a reasonable duration of time?

A reasonable duration of time is typically viewed in context of the other factors and the overall situation (i.e. what is reasonable in one situation may not be reasonable in other circumstances). However, in Florida there are some general guidelines and presumptions that are detailed in Florida law (Florida Statutes § 542.335(d):

(d) In determining the reasonableness in time of a post term restrictive covenant not predicated upon the protection of trade secrets, a court shall apply the following rebuttable presumptions:

1. In the case of a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, and not associated with the sale of all or a part of:

a. The assets of a business or professional practice, or

b. The shares of a corporation, or

c. A partnership interest, or

d. A limited liability company membership, or

e. An equity interest, of any other type, in a business or professional practice,

a court shall presume reasonable in time any restraint 6 months or less in duration and shall presume unreasonable in time any restraint more than 2 years in duration.

2. In the case of a restrictive covenant sought to be enforced against a former distributor, dealer, franchisee, or licensee of a trademark or service mark and not associated with the sale of all or a part of:

a. The assets of a business or professional practice, or

b. The shares of a corporation, or

c. A partnership interest, or

d. A limited liability company membership, or

e. An equity interest, of any other type, in a business or professional practice,

a court shall presume reasonable in time any restraint 1 year or less in duration and shall presume unreasonable in time any restraint more than 3 years in duration.

3. In the case of a restrictive covenant sought to be enforced against the seller of all or a part of:

a. The assets of a business or professional practice, or

b. The shares of a corporation, or

c. A partnership interest, or

d. A limited liability company membership, or

e. An equity interest, of any other type, in a business or professional practice,

a court shall presume reasonable in time any restraint 3 years or less in duration and shall presume unreasonable in time any restraint more than 7 years in duration.

8. What is considered a reasonable restriction on the nature of duties performed?

In general, courts look to the nature of the work performed, the length of time the employee was employed by the employer, whether the employer conferred special training or education as a benefit of employment, whether the employer shared trade secrets with the employee which could substantially affect the employer if used by a competitor, whether the information the employee possesses is really kept confidential by the employer and whether the knowledge the employee has is unique to the employer, or of a general nature, such as general sales experience. Typically, prohibitions against using general knowledge are disfavored. Another common restriction relates to contact or solicitation of current substantial clients or customers of the employer.

9. Does my employer have to pay me additional money in exchange for a non-compete agreement?

Probably not, in Florida continued employment is often treated as sufficient consideration. Specifically, Where a restrictive covenant specifies, in unambiguous terms, that the agreement is supported by consideration in the form of continued employment, it cannot be found void for lack of consideration.

10. If I have already agreed to a covenant not to compete, can I get out of it?

It depends. Florida law supports non-competes, so the very specific details of your exact situation will all play into whether or not the agreement will be enforceable against you. In addition to the details listed in these posts, there are many other considerations that a licensed attorney should research and consider. Only after a thorough review will an attorney be able to give you a better idea about the enforceability in your situation.

 

For additional information, please contact The Gordon Law Firm | P.A. at www.thegordonfirmcom

 

“Making the law work for you and your business”

Please note that the above questions were answered generally in context of Florida Law. The laws of other states may differ. In addition, the statements above are general comments about the law. As such, these statements should not be relied upon when making a legal decision. If you have any questions, please consult with an attorney licensed to practice law in your jurisdiction.

 

If you need assistance understanding your rights regarding a non-compete agreement or you are a business that wishes to draft or enforce a non-compete, please contact The Gordon Law Firm in Oldsmar, Florida.   The Gordon Law Firm serves all of Pinellas, Hillsborough, and Pasco Counties including the cities of Oldsmar, Clearwater, Tampa, New Port Richey, Westchase, Tarpon Springs, and St. Petersburg, as well as the entire Tampa Bay area. 

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