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Can Your Florida Business Benefit From a Non-Compete or NDA?

Businesses need to protect themselves. One of the easiest methods is through documents by which another party agrees not to improperly use or take information or personnel from the business to compete against it. These documents are non-compete or non-competition agreements, non-solicitation agreements, and non-disclosure agreements and they can provide great benefits to a business in Florida ?when prepared properly.

While these documents may not stop someone from stealing information or persuading key employees to leave, they do place the business in a position to more easily enforce its rights and protect itself. However because they limits free trade there are restrictions that apply to some of those documents therefore they must be prepared by competent counsel to avoid making the situation worse.

What is a non-compete, non-disclosure, and non-solicitation?

Non-competes, non-disclosures or NDAs, and non-solicitation agreements like most contracts are reactive. They will not literally prevent someone from competing or stealing trade secrets but they create an efficient method for a business to enforce its rights.

Non-competes in Florida are regulated by a particular state and are terms restraints of trade. As such they are required by law to be reasonable with regard to the geographic and temporal restrictions they set. Some of these limits are defined in the statute while others are dependent on the manner in which the business operates. These agreements can stand alone or be a part of another agreement, like an employment agreement. When taken alone they are non-compete agreements. When embedded in another contract, they are non-competition clauses.

Non-disclosure agreements or NDAs identify and protect propriety information and trade secrets before they are disclosed. They can provide for the length of time during which the trade secrets are treated as confidential and define the penalties for violations. They too can stand alone or be part of another contract like an independent contractor agreement.

Non-solicitation agreements limit or deny a party from taking employees, contractors, and/or customers of the business. These too can be limited in time and often define what is and what is not allowed.

While these agreements can stand alone or be combined with one another or other agreements, only the non-compete is required to have clearly defined consideration to support the agreement. This is so because of its unique statutory controls. If the independent consideration is absent, it may be deemed unenforceable.

Which if these is right for a business, when, and what terms to include are the subjects of discussions with your corporate counsel. That person should provide the options and guidance so that the final agreement has the optimum chance of being enforced later should the need arise.

It is not recommended to do this yourself!

Business owners that elect to create their own contracts or download these documents from an unknown source to avoid the expense of paying for expert business law advice usually create a bigger and more expensive problem for the business later.

A business that relies on its self-created or downloaded documents can believe for years that it is protected by such defective documents only to find out when it tries to enforce them that they do not work leaving the business unprotected. Too often business owners who have been penny wise and pound foolish learn that they cannot sue a former employee or other person who worked for the business on their agreement after that person left with trade secrets, customers, or took other critical employees with them because the self-created or downloaded document is not enforceable.

When a business spends significant time and money to develop proprietary and confidential business information the loss of that information to a competitor for example can be financially and emotionally devastating. That is not the best time to learn that the self-created or downloaded documents that saved a bit of money for the business at the time have now left without recourse when the business itself unwittingly empowered its own competition that will damage or destroy the business.

Be smart, be proactive.

After spending years and significant sums to grow a business, one of the worst imaginable issues that the owner or owners can face is learning that they are helpless to fight off an attack from a former employee or new competitor who has absconded with what the business owner thought was protected proprietary business information.

Business owners that elect to create their own contracts or download these documents from an unknown source to avoid the expense of paying for expert business law advice usually create a bigger and more expensive problem for the business later. Email us at info@jamesnbrownpa.com or call us at 561-838-9595 to be prepared.

Source: Law Office of David Steinfeld, PL, Florida via HG.org


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