Protecting Your Valuable Business Information and Relationships
When survey after survey of America’s workforce confirms that a large majority of employees admit to taking data from their current or former employers without permission, safeguards to protect proprietary and confidential information, including trade secrets, become a priority. The loss of corporate data can be devastating. When a former employee or former business owner solicits business contacts or employees, the results can be equally damaging. In today’s highly competitive marketplace, it is essential for businesses to have a well-developed plan in place to protect corporate data and business relationships. Such plans should employ several tools, including, but not limited to, appropriate security safeguards, confidentiality policies, and agreements containing restrictive covenants.
As discussed in a May 2016 blog post, a federal civil remedy became law and employers no longer are limited to state court remedies to combat a misappropriation of trade secrets.
Restrictive Covenants in Florida – In Florida, a business can use restrictive covenants to obtain a promise from an employee, independent contractor, officer, agent, or even a seller of an acquired business not to engage in any behavior contrary to its business interests. Certain restrictive covenants protect specific interests. For example, a covenant “not to compete” is generally a promise that the employee, independent contractor, officer, agent, or seller will not be involved, in any capacity, in a competitive business in a certain geographic area for a certain time period. Other restrictive covenants include covenants “not to solicit” the employer’s customers, clients, donors, or current employees and covenants “not to disclose” the employer’s confidential business information.
Enforcement of restrictive covenants in Florida is governed by statute. The current statute provides that the enforcement of contracts that restrict or bar competition is permitted as long as the restrictions are reasonable in time, area, and line of business. Additionally, the contracts must be in writing and signed by the persons agreeing to the restrictions. To enforce a restrictive covenant, a business must be able to demonstrate that the covenant it seeks to enforce was based on the need to protect a “legitimate business interest(s)” and that the contractual restraint is reasonably necessary to protect such interests. Florida courts deem restrictive covenants not supported by a legitimate business interest to be unenforceable. In determining whether a restrictive covenant is properly supported, Florida courts may not take into consideration the relative hardship the enforcement of a restrictive covenant would have on the person against whom enforcement of the agreement is sought.
To read more on restrictive covenants, Florida’s Uniform Trade Secrets Act, and best practices for protecting information and relationships see the full article in Williams Parker’s recently published edition of Requisite, a firm publication offering insights on important legal issues. Additionally, you may view the digital version of Requisite in its entirety for more articles on topics critical to senior executives in managing their businesses and the associated risks.