Articles Posted in Employment Law

Daniel PascaleBy: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

In determining the reasonableness in time of a postterm restrictive covenant (a.k.a. a non compete agreement) not predicated upon the protection of trade secrets, a court must apply the following rebuttable presumptions:

In the case of a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, and not associated with the sale of all or a part of: (1) the assets of a business or professional practice; (2) the shares of a corporation; (3) a partnership interest; (4) a limited liability company membership; or (5) an equity interest, of any other type, in a business or professional practice, a court must presume reasonable in time any restraint six months or less in duration and must presume unreasonable in time any restraint more than two years in duration

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Daniel PascaleBy: Daniel T. Pascale, Esq.

Offices located in Delray Beach and Coral Gables, FL

Courts have traditionally viewed noncompete agreements with disfavor, believing that the agreements contravene public policy. The agreements were seen as unfair restraints on trade and in response, the common law prohibited the use of such agreements. In time, the restrictions on such agreements lessened. Nevertheless, the common law has generally restricted their use for any purpose other than for legitimate business purposes. To ensure the purpose is legitimate, the law requires that a valid noncompete agreement meet a reasonableness requirement.

The reasonableness requirement is designed to balance the interests of all entities affected by the noncompete agreement: the employer, the employee, and society as a whole. Each entity has an interest to be protected. The employee wishes to preserve his mobility; the employer wishes to protect itself from unfair competition; and society wishes to balance with a system that provides incentives for the development and training of employees. With such varied interests at hand, the successfully drafted noncompete agreement must be sculpted carefully as to satisfy all three parties.

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