Patrick Causey authored an article for the August 12, 2022 issue of Tampa Bay Business Journal discussing why it is not always a good idea to require all employees to sign non-compete agreements.
“In Florida, employers are armed with several tools to protect against competitors poaching top employees,” Causey said. “For example, an employer can require employees to sign non-competition, non-solicitation and confidentiality agreements as a condition of employment.”
Employers have used non-compete type agreements only for high-ranking executives and client-facing employees for years, but over the last decade, some employers have become more aggressive regarding who they ask to sign non-compete agreements. Citing cases in which lower-income workers have been sued for non-compete violations or forced to sign highly restrictive agreements, Causey raised a dilemma that has confronted employers and legislatures across the country: Although employers can require entry-level employees to sign non-competes, should they?
From a legal perspective, non-compete agreements for entry-level employees are doubtful to be enforceable. “Courts in Florida will not enforce a non-compete agreement simply because an employee signed one,” Causey said. “Instead, the onus is on the employer to show it has a ‘legitimate business interest’ that it is trying to protect.”
Causey goes on to discuss the practical arguments against enforcing a non-compete agreement against an entry-level employee, such as the cost of litigation for a relatively low-stakes matter. He also considers whether it makes sense morally to impose non-competes on entry-level or low-income employees. “Is it the right thing to do? Most entry-level employees do not have the resources or sophistication to negotiate non-compete agreements or obtain legal advice to resist their enforcement,” Causey said. “Forcing them to sign an agreement and preventing them from taking jobs they want hinders the economy, hurts your employees and is a morally questionable business practice,” he concluded.
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