What is a Non-Compete Clause in an Employment Contract?
Overview and Enforcement of Non-Compete Clause in Employment Contracts
A non-compete clause is a common provision found in employment contracts that restrict employees from working with a competitor of the employer and in some cases any other healthcare provider. These types of provisions are also known as covenants not to compete or non-compete agreements. Non-compete agreements usually limit the geographical location where the employee can work within a similar type of work and the timeframe for which that limitation will last.
3 Things to Consider Before you Sign a Non-Compete Agreement
- Attorney Review. Before you sign a non-compete agreement, have an attorney review the employment contract that contains such provisions. Although a non-complete clause may seem simple, it may be detrimental to you. Under Florida law, an employer is not required to consider your economic hardship that may result because of the restrictions. The employer does not have to take into consideration your life circumstances that may result from the loss of income. An employer will draft a non-compete agreement to favor their interest. The attorneys at Howell, Buchan & Strong can review your contract before you sign it to help you understand the significance of any non-compete provisions.
- Limits on Future Employment. A non-compete agreement may prevent you from obtaining future employment in the same field and same geographical area. The reality is that a non-compete agreement could force you to seek employment in a different profession or force you to travel or to move to a different state for work. These agreements may affect your future earnings as well as your investments in the company if you have stock options or ownership interest in the business. Note: Long-term implications of non-compete agreements can affect your entire life and family. For instance, if you work in a healthcare facility in central Florida, a non-compete clause in your contract could limit you from working within a 100-mile radius of the facility for two years after the employment. The circumstances could force you to leave the healthcare field altogether.
- Civil Liability. An employer could sue you for breach of contract to enforce the non-compete clause if you violated the restrictions within the agreement. Not only would you have lost employment, if your employer successfully proves your breach, you could be responsible for attorney fees and any other costs. The attorneys at Howell, Buchan & Strong can help you defend against a breach of contract claim to enforce a non-compete agreement.
Enforcement of Non-Compete Agreements
A non-compete agreement must protect a legitimate business interest and it must be in writing. When determining whether to enforce a covenant not to compete, the court looks to the reasonableness of the restriction. Geographical location limitations depend on the nature of the work. Typically, a nationwide restriction is unreasonable, and the court will not enforce that provision. Covenants usually should include a time limit if it doesn’t include one the court could impose a reasonable one.
Even if you already signed an employment agreement that includes a covenant not to compete, the provision may not be enforceable. The attorneys at Howell, Buchan, & Strong can help review the agreement to ensure your interests are protected. Meet our Contract Review Team.
Contact the law offices of Howell, Buchan & Strong, Attorneys at Law for your free consultation at any one of our locations:
Orlando (407) 717-1773 | Tallahassee (850) 877-7776 | Tampa (813) 833-6726 | Sarasota (941) 779-4348