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Restrictive covenants can be the subject of business litigation

Many people, as part of either having a job at a specific business or upon leaving the employment of a specific business, will sign a restrictive covenant, sometimes referred to as a non-compete agreement. These agreements restrict, for a certain period of time, where a person can work and what information from their former employment they can use. Sometimes, however, these agreements are challenged, with one party or the other saying they should or shouldn't be enforced. Under Florida statutes, if a non-compete agreement is "reasonable" with regards to the time of the restriction, the geographical area of the restriction and the line of business of the restriction, then it can be enforced if it is in writing and bears the signature of the party against which enforcement of the non-compete is being sought.

Also, if a party wishes to have a non-compete agreement enforced, that party bears the burden of proving that there is a legitimate business interest justifying enforcement of the non-compete agreement. Some legitimate business interests include, but are not limited to, keeping business information confidential, protecting trade secrets, retaining substantial customer relationships and more.

If the party seeking to enforce the non-compete agreement meets this burden of proof, the burden of proof is shifted to the party opposing the enforcement of the non-compete agreement. That party must show the agreement is too broad, spans too great a timeframe or in some other way is not reasonably necessary to protect the business interests of the party wishing to enforce the agreement. There are statutory rebuttable presumptions the court will use to make these decisions.

Businesses often rely on confidential or proprietary information to maintain their viability and success. For example, they may have trade secrets, client lists, certain modes of operation and other items and processes that they wish to keep protected from competitors. Restrictive covenants can achieve this goal, but they are often the subject of business litigation. For example, a business may feel an employee or former employee has breached the contract, or an employee or former employee may seek to have the agreement voided. When business disputes such as this arise, it is important for both parties to understand how the law will apply to their unique situation, so they can make informed decisions about how to proceed moving forward.

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