Non-Compete Clauses

 

Two businesswomen arm wrestling

Non-compete (or non-competition) agreements limit or prevent competitive business activity or such potential activity during and/or after employment.  The results of such agreements can be financially devastating on employees caught in their snare.  Often, we are consulted by employees who have previously signed non-competition agreements under the common (but very mistaken) belief that such agreements are generally unenforceable.  That belief is based upon an “urban myth,” the origin of which we are uncertain, but the vitality of which is quite stubborn.  In reality, each state has its own laws regarding non-competition agreements and other restrictive covenants.  Some agreements state a particular jurisdictional / law selection within the agreement terms.  Other agreements are silent on the issue of which state law applies.  Indeed the “choice of law” and jurisdictional issues evoked by non-compete agreements are themselves the subject of much litigation.  In Florida, we have a statute that allows, under certain circumstances for non-competition agreements and other restrictive covenants to be enforced.  The question of whether a particular agreement and particular circumstances meet the qualifications of the statute requires individualized analysis.  The considerations when entering into a non-competition agreement need to be carefully and strategically considered from the personal angle, the legal angle and the business angle.  If you have spent your career developing an expertise in a particular niche, and then sign a non-compete agreement, you could be signing away the key to your most valuable asset for a prolonged period of time.  Even a restrictive covenant of 6 months or a year can severely impact one’s career, particularly in industries where relationships and information change quickly, and an employee can be “outdated” by the time he or she is allowed to re-enter the competitive arena.  Employees who have already entered into non-competiition agreements should have skilled counsel review them so that they know what their options and possible strategies may be.  Those considering signing a non-competition agreement should certainly consult with skilled employment law counsel before making the decision.  Each situation is unique and there is no one-size-fits-all approach for making the decision on these issues.  Knowing all of your options and the consequences of each will enable you to make an informed decision about a matter that may greatly impact your future

The law firm of Sigman & Sigman, P.A. advises and represents clients regarding non-competition agreements and restrictive covenants, both before and during litigation.