LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
Whether you work in the copy room or in a corner office,
you may have been presented with something called a Non-Competition Agreement.
Or maybe it was called something sneakier, like a Confidentiality Agreement or
Intellectual Property Agreement. Whatever it was called, it said you can't work
for a competitor of the company for a year or two after you leave.
If you haven't been forced to sign one yet, beware. They're all the rage with
management these days. Physicians, managers, executives, professionals and
employees are often given the choice: sign or be fired.
While companies claim all kinds of reasons why they want a non-compete
agreement from their employees, there's only one reason they really want it: to
prevent a competitor from luring you over to work for them. They want to do
everything they can to inhibit and prevent competition. But they will almost
never admit that's the real reason.
Why not? Because preventing competition is the one reason that will never, ever
justify a non-compete agreement.
While every state has different laws regarding enforceability of noncompetes,
most allow them in some form or other. I'll use Florida's as an example, since
I'm most familiar with it.
Florida law says:
542.18 Restraint of trade or commerce.-Every
contract, combination, or conspiracy in restraint of trade or commerce in this
state is unlawful.
This law is similar to the Federal equivalent, the
Sherman Antitrust Act, which makes all contracts, combinations, and
conspiracies that unreasonably restrain interstate and foreign trade illegal.
There are both civil
for violations of the Sherman Act and the Florida antitrust law.
The Florida noncompete
statute is a very specific exception to the antitrust laws. It says, in
542.335 Valid restraints of trade or
(1) Notwithstanding s. 542.18
and subsection (2), enforcement of contracts that restrict or prohibit
competition during or after the term of restrictive covenants, so long as such
contracts are reasonable in time, area, and line of business, is not
prohibited. In any action concerning enforcement of a restrictive covenant:
(a) A court shall not enforce a restrictive
covenant unless it is set forth in a writing signed by the person against whom
enforcement is sought.
(b) The person seeking enforcement of a
restrictive covenant shall plead and prove the existence of one or more
legitimate business interests justifying the restrictive covenant.
The statute sets out some things the legislature considers legitimate
interests, such as trade secrets, substantial relationships with customers and
client goodwill. But preventing competition is not a legitimate interest to
If your employer doesn't have a truly legitimate interest to protect, then they
are violating antitrust laws by enforcing or trying to enforce a
non-competition agreement. Unless you're the holder of the company's secret
recipe, you might want to talk to an employment
lawyer in your state about defenses you have to your noncompete obligations
before you decide you have no choice but to step out of your industry for a
year or two.
See more employment law posts on Donna
Ballman's blog, Screw You Guys, I'm Going Home.
For more information about LexisNexis
products and solutions connect with us through our corporate site.