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Restrictive contractual agreements could protect businesses

On Behalf of | Jun 2, 2021 | Business & Corporate Law

A business is typically an owner’s most significant asset. As a result, Florida business owners want to protect that asset as much as possible. Unfortunately, businesses face risks from numerous sources, including employees. Though employees are a vital part of ensuring company growth and production, if a disgruntled worker leaves and begins working for a competitor, that competitor could become privy to confidential information. Luckily, business owners can create contractual agreements to safeguard against that type of outcome.

Such agreements are commonly known as restrictive covenants because they restrict employees from taking certain actions that could potentially harm a business. However, it is important to keep in mind that these types of agreements must adhere to the laws associated with such business contracts. If an employer attempts to prevent workers from finding employment with another company in the same industry across the entire United States, a court would likely find those terms too broad and consider the contract invalid.

When working on useful protections and restrictive covenants, the following agreements may be useful:

  • No-solicitation agreements that work to prevent employees from lobbying for clients, customers or co-workers of the current company to move to a new company
  • Non-compete agreements that work to prevent employees from leaving one company and going to work for a direct competitor in the same industry and within a certain area
  • Confidentiality agreements or non-disclosure agreements that work to prevent workers from disclosing trade secrets, intellectual property information or other confidential details

It is not entirely possible to prevent workers and former employees from taking actions that could harm a company. However, these contractual agreements could give businesses the ability to hold an employee liable for any damages that may result from breaking this type of contract. As a result, Florida business owners will undoubtedly want to ensure that they have the right protections in place and that those agreements comply with state laws.