Should I sign a noncompete my employer gave me

Whether to have a noncompete comes up on both the employer and employee side. As a Board Certified expert in Florida business law I would say whether to offer or sign one depends on the unique circumstances because they are regulated and limited by law.

Noncompetes are regulated by Statue

In Florida, employment is at will. So, if there is no employment agreement, the the employee serves at the will of the employer. As a consequence, restricting that freedom of employment is regulated by a specific statute formally called Restraint of Trade, but commonly referred to as the non-compete statute.

Noncompetes must be reasonable

Because a noncompete restricts future employment, the Statute requires that it be reasonable in the time scope and geographic limits.  The time limits are in the statutes. Up to two years is ok and one year is deemed reasonable. That's not to say it is automatic, but most times those limits hold up. 

How far the noncompete goes is a different story. The reasonableness of the geographic limitations of a noncompete depend on the circumstances. When I draft these important business contracts I put the reason for the geographic limits right in the agreement. If the noncompete has t be enforced by a judge later, it makes it very easy to prove the reasonableness of the limit based solely on the unambiguous terms of the agreement itself. If the basis for the limitation is absent from the document and can not adequately be established by other evidence, thegeographic scope is subject to being reduced or even the noncompete being rendered unenforceable.

Noncompetes are contracts so they require consideration

A noncompete is a contract between a business and another party. That party could be an employee, but it could also be an independent contractor or someone like that. Because it is a contract it requires the basics of a contract, which are an offer, acceptance of the offer, and consideration. Consideration in contract terms is a fancy way to say money basically. So noncompetes also require some money or other consideration to b enforceable.

Is employment enough consideration for a noncompete

Excellent question. Employment can be consideration for a noncompete, but if the subject of the noncompete is already employed then there is a significant risk that the future or continued employment might not be adequate consideration. The real gamble of balancing a noncompete on futue or continued employment is that it might not be enforceable later.  When I draft noncompetes for my business clients, I want them to be enforceable and the businesses want them to be enforced. No point in spending money for a noncompete if it won't work. So my recommendation is usually have the new hire sign the noncompete as part of an employment package before the employment starts so the future employment will be adequate consideration and I note that in the agreements I write. Otheriwise, I suggest in mot cases of existing employment to create actual consideration through something like a bonus documented in the agreement to eliminate any chance its enforceability might later come in to question.

Conclusion

Whether or not to sign a noncompete from your amployer or whether to present one to your employee or independent contractor is not cut and dry as one might think. This article is not intended to provide legal advice, but clearly it is prudent to seek the advice and counsel of a seasoned business lawyer on either side of the contract or both. A noncompete is not a bad option for a business to protect itself and is not a detriment to future employment especially because limitations and exceptions can be negotiated by the parties.  

Where most business owners and their employees or independent contractors often err is in not seeking proper legal advice before offering or signing a noncompete. In Florida, Board Certified business lawyers are tried, tested, and proven experts in the field and are a valuable resource for anyone wanting to understand the implications of a noncompete. I would encourage anyone to seek that advice before entering into the contract.

About the Author

David Steinfeld is one of the few Board Certified business law experts in Florida and has been licensed in Florida for almost twenty-five years. He is AV-Preeminent rated, is one of the Best Lawyers in America by U.S. News and World Report, a Florida Super Lawyer, and one of Florida’s Legal Elite. Dave has received Martindale’s prestigious Judicial Edition Award for high reviews by Judges, its Platinum Client Champion Award and holds a 10.0-Superb rating on AVVO and a 10.0 rating on Justia, lawyer reviews websites.

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