Are you a Florida business owner?
Are you protecting your business by ensuring your employees sign a noncompete agreement? If so, a new ruling by the Federal Trade Commission (FTC) will affect all noncompete agreements nationwide.
What is a non-compete agreement?
A non-compete agreement is a legal contract between an employer and employee that limits the employee from engaging in conduct that would increase competition for the employer or other party for a specific amount of time.
In Florida noncompete agreements are governed by Section 542.335 of the Florida Statutes.
Will this affect Florida business?
Yes, whenever a federal agency issues a new act that directly conflicts with state law, the federal act prevails and is the ruling law. The FTC has ruled that non-compete agreements are an unfair method of competition pursuant to sections 5 and 6 (g) of the FTC Act. Under the final rule, it will be a violation of the FTC Act for employers to enter noncompete agreements with employees on or after the final rule’s effective date.
How does this affect current noncompete agreements?
All new and future noncompete agreements will be unenforceable. All current noncompete agreements will terminate on the effective date of the final rule. That date is September 4, 2024. Upon its effect, an employer must give notice to the employee with noncompete agreements that the noncompete is no longer enforceable.
Are there exceptions to the final rule?
Yes, the final noncompete rule will not apply to the following:
· Existing senior executive noncompete agreements
· Noncompete’s entered by a person to a bona fide sale of a business entity.
· Legal actions taken to enforce noncompete agreements that occur prior to the effective date of the final rule.
· When a person in good faith believes the rule does not apply.
Contact one of our Florida Attorneys
At RAK Law Firm, we understand how confusing these new laws and policies can be. Our team is well-versed in the complexities of the ever-changing legal landscape, with years of significant litigation experience. If you need help navigating your rights regarding non-compete agreements, we are here to assist.
Call us today to schedule a consultation.