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What could invalidate a noncompete agreement?

On Behalf of | Apr 21, 2023 | BUSINESS & COMMERCIAL LAW - Business & Commercial Law

Having some of your employees sign a noncompete contract makes sense if they have access to sensitive company information they could use if they leave your employ to compete against you. However, noncompete agreements are not always enforceable.

Like any business contract, a noncompete must comply with legal standards. Otherwise, one of your employees could take you to court and a judge may rule that the contract is invalid. Chron explains some issues a court will likely look at while examining a noncompete agreement.

The employee in question

Not every worker needs to sign a noncompete. If your employee lacks access to any sensitive information, a court might find it unnecessary for a noncompete agreement to restrict where your employee can work.

Adherence to state law

The laws of the states govern how noncompetes work, assuming that a state allows a business to implement one at all. This means your agreement must comply with the requirements of Florida law concerning noncompete contracts and business contracts in general.

Geographic limitations

Noncompetes must reasonably limit where a former employee can work. A judge could decide that a noncompete is unfair if it extends too far beyond the specific area where the business operates.

Duration of the agreement

A noncompete should establish how long the agreement will last. Generally, noncompete agreements last from six months to two years. A court will almost certainly invalidate a noncompete that endures any longer.

In general, a noncompete should strike a reasonable balance between protecting the interests of a company and not infringing on the interests of an employee. This is important to keep in mind when crafting your noncompete contracts.