Noncompete agreements operate to restrict an employee from competing against his or her employer in the event that the employee leaves the company. These agreements are used to protect, among other things, customer lists and contacts, trade secrets and certain intellectual and proprietary assets that an employee may learn about while employed with a company. The use of noncompete agreements for design professionals is increasing. In fact, the United States Chamber of Commerce suggests that employers ask “all engineers and drafting employees engaged in design or engineering work” to sign such agreements.
The restrictions contained in a noncompete agreement may limit certain future activities of a former employee. For instance, they can restrict his or her ability to work for certain future employers as well as the geographical area of employment. Along with nonsolicitation agreements (which typically prevent an employee leaving a company from recruiting former co-workers or soliciting a company’s existing customers), noncompete agreements are known as restrictive covenants.
Who Governs Noncompete Agreements
Noncompete agreements are governed by state law. Therefore while they are generally valid in certain states such as New York, they could be found to be an illegal restraint of trade in other states, such as California. In Florida noncompete agreements are generally enforceable contracts. When enforceable, they give employers the right to sue and seek to stop an ex-employee from accepting certain positions that would be considered competitive to the company.
Noncompete Agreement for Professionals
For employers, noncompete agreements offer an enforceable method of protecting the intangible assets of a business when an employee leaves. For employees, a valid noncompete agreement could serve to block future employment. While applicable statutes may limit the enforceability of certain agreements based on an analysis of the legitimate business interests being protected, both employers and employees should assume that, once signed, noncompete agreements are likely be enforceable.