Successfully Defending Employees in Noncompete and Trade Secret Litigation

Noncompete agreements are becoming more common as companies try to protect their business interests from employees moving to competitors. These agreements can have serious consequences for employees, so it’s important to have a lawyer review the agreement before signing it. In Florida, noncompete agreements must be in writing and signed by the employee to be enforceable. The employer must also prove that they have a valid business reason for the noncompete. If you’re facing a noncompete agreement, it’s important to understand your rights and consider seeking legal help. A noncompete agreement is a contract that an employee signs to not work for a competing company after leaving their current job. If the employee thinks the agreement is too strict, they can challenge it in court. The first step in enforcing the noncompete agreement is for the employer to ask the court for temporary injunctive relief, which would prevent the employee from working for a competitor while the case is being decided. It’s really important for the employee to try to stop this from happening, because if they lose, it can be really tough emotionally and financially. It can also make it harder to work out a compromise with the employer in the end. So, it’s a big deal to fight against it from the start. When defending against a temporary injunction, the employee’s legal team should emphasize that it’s an extraordinary remedy that should be sparingly granted. The former employer must show that there is a likelihood of irreparable harm, they are likely to succeed in their case, the harm to them outweighs any harm to the employee, and it’s in the public interest to grant the injunction. However, arguing against irreparable harm may be futile because of Florida law. Instead, the focus should be on challenging the likelihood of the employer winning the case. If the injunction can’t be completely defeated, the goal should be to limit its scope. A court case in Florida talked about a noncompete agreement where an employee promised not to take customers from their old company for 5 years after leaving. The court issued an injunction that went too far and restricted the employees from having any contact with their previous employer’s customers, not just from soliciting them. This was not allowed under the noncompete agreement. The court also didn’t distinguish between existing customers and potential ones. There are defenses to enforcing noncompete agreements, such as if the employer broke their part of the contract first. If your employer breaks the contract by not paying you or not following other important terms, you might not have to follow the noncompete agreement you signed. Florida courts have said that if your employer doesn’t hold up their end of the deal, you might not have to follow the noncompete agreement. For example, in one case, a doctor’s employer didn’t pay her the full bonus she was owed, so she was not required to follow the noncompete agreement. In the case of Troup v. Heacock, a person was hired to sell insurance, and they had a contract that said they would be paid $125 per week. The employer changed the pay to $100, then $50 per week. The court said this was a big violation of the contract, so the employee could leave and work for someone else. If your employer breaks important parts of your employment contract, like not paying you properly or treating you unfairly, you might not have to follow the noncompete agreement you signed. In one case, an employee said they were forced to quit after refusing to do unethical things, and in another case, an employee said they were sexually harassed by their boss. In both cases, the court said the employees didn’t have to follow the noncompete agreement. So, if something really important is broken in your contract, you might not have to follow the noncompete. In Thomas v. Federal Insurance Agency, the employee’s contract said it could be ended by either the employer or the employee with 60 days notice, or the employer could end it without notice if there was a good reason. The contract also said the employee couldn’t work for a competing insurance business or write policies for the employer’s clients after leaving. The employee said the employer broke the contract by stopping their pay without notice and without a good reason, so they shouldn’t have to follow the noncompete rule. The judge agreed and said the employee didn’t have to follow the noncompete rule because the employer broke the contract first. It’s important to know that employers who use noncompete agreements often violate workers’ rights under the Fair Labor Standards Act. If your employer doesn’t pay you according to the law, it’s a breach of your employment contract. This can be used as a defense if they try to enforce a noncompete agreement. If the employer has done something wrong in the past, like making you do something illegal, it can also be used as a defense. Sometimes it’s a good idea to take the first step and file a lawsuit to challenge the noncompete agreement before the employer has a chance to sue you. The main goal is to prove that the contract restricting the employee is not valid and to possibly get compensation for the employee. The employee should make sure they have not done anything wrong in relation to their previous job. Trade secrets are information that give a company an advantage and are kept secret. If there is a disagreement about whether the employee took trade secrets, it can be a very intense and unpredictable situation. It’s better to focus on the legal issues around what qualifies as a trade secret and whether the employer has given up their right to keep it secret. A company’s customer list may not be considered a secret if it can be easily found on the internet or in public sources. In Florida, a customer list is only considered a trade secret if it took a lot of time or money to create, or if it includes information that is not publicly available. In one court case, a former employee was allowed to use the contacts and knowledge they gained while working for a magazine because the list of advertisers was not considered a trade secret. In a court case, it was determined that a company’s customer list was a “trade secret” because it took a lot of time and money to create. This means that former employees were not allowed to use the list for their own benefit, even if there was no agreement saying they couldn’t. They were not allowed to contact or sell to the company’s customers. In order for an employer’s customer list to be considered a trade secret, it has to be more than just a list of potential leads. It should contain the names of customers who have actually done business with the employer and be kept confidential. Employers can’t claim their “prospective” customer lists as trade secrets if the information is easily available to the public. If an employee is facing noncompete and trade secret litigation, it’s best to get legal help early and work out a plan before leaving their job. It’s important to investigate defenses to injunctive relief and determine if the former employer breached the employment contract. Any claims by the former employer that certain documents are trade secrets should also be checked against the law. N. James Turner is a lawyer in Orlando who specializes in employment law. He helps people with things like employment contracts and getting paid for overtime work. He’s really good at what he does and has a lot of experience. He’s also a founding member of a group for lawyers who specialize in employment law in Florida. This article was written by him on behalf of a group of lawyers who focus on labor and employment law.

Source: https://www.floridabar.org/the-florida-bar-journal/successfully-defending-employees-in-noncompete-and-trade-secret-litigation/