Making a business in Florida – Part 9 of 9
As we examined in the preceding post trademarks and service marks are one method by which a business can add value to and protect its brand. But they are not the only protection available to your business.
Non-compete agreements, non-solicitation agreements, and non-disclosures are also mechanisms by which a business can place itself in a position to more easily enforce its rights and protect itself. However, there are certain legal restrictions that apply to some of those documents leading one to the recommendation of “don’t try this at home”.
What is a non-compete or non-disclosure or non-solicitation
Non-competes, non-disclosures or NDAs, and non-solicitation agreements like most contracts are reactive. They will not literally prevent someone from competing or stealing trade secrets but they create an efficient method for a business to enforce its rights.
Non-competes in Florida are regulated by a particular state and are terms restraints of trade. As such they are required by law to be reasonable with regard to the geographic and temporal restrictions they set. Some of these limits are defined in the statute while others are dependent on the manner in which the business operates.
NDAs identify and protect propriety information and trade secrets before they are disclosed. They can provide for the length of time during which the trade secrets are treated as confidential and define the penalties for violations.
Non-solicitation agreements limit or deny a party from taking employees, contractors, and/or customers of the business. These too can be limited in time and often define what is and what is not allowed.
These agreements can stand alone or be combined with one another or other agreements like employment contracts. Only the non-compete because of its unique statutory controls is required to have clearly defined consideration to support the agreement otherwise it may be deemed unenforceable.
Which if these is right for a business, when, and what terms to include are the subjects of discussions with your corporate counsel. That person should provide the options and guidance so that the final agreement has the optimum chance of being enforced later should the need arise.
It is not recommended to do this yourself
Business owners that elect to create their own contracts or download these documents from an unknown source to avoid the expense of paying for expert business law advice, such as that from Florida Bar Board Certified business litigation lawyer David Steinfeld, usually create a bigger and more expensive problem for the business later.
A business that relies on its self-created or downloaded documents can believe for years that it is protected by such defective documents only to find out when it tries to enforce them that they do not work leaving the business unprotected. Too often business owners who have been penny wise and pound foolish learn that they cannot sue a former employee or other person who worked for the business on their agreement after that person left with trade secrets, customers, or took other critical employees with them because the self-created or downloaded document is not enforceable.
When a business spends significant time and money to develop proprietary and confidential business information the loss of that information to a competitor for example can be financially and emotionally devastating. That is not the best time to learn that the self-created or downloaded documents that saved a bit of money for the business at the time have now left without recourse when the business itself unwittingly empowered its own competition that will damage or destroy the business.
Be smart, be proactive
After spending years and significant sums to grow a business, one of the worst imaginable issues that the owner or owners can face is learning that they are helpless to fight off an attack from a former employee or new competitor who has absconded with what the business owner thought was protected proprietary business information.
Thus, sophisticated business owners invest the time and money to consult with Florida law business experts like David Steinfeld to understand the options available to them and to be able to make informed decisions on those points, which avoids more costly future disputes ever time.
The Palm Beach Business Lawyer Blog
Board Certified expert in Florida business law, David Steinfeld has almost 25 years legal experience.