Non-competes & Employee Mobility
Cantrell, Astbury, Kranz, P.A., known as Premier Litigators, is one of the few law firms nationwide that dedicates a large portion of its legal practice exclusively to providing counseling and litigation services for competition-related disputes – namely, workplace non-compete, non-solicit, and non-disclosure of confidential agreements and trade secrets.
We have significant experience in virtually every industry and with most positions, ranging from Fortune 500 companies, start-up entrepreneurs, people in sales, recruiters, agents, professionals (including financial advisors, attorneys, engineers, and physicians), and c-suite executives, to contractors, salon stylists, and blue-collar workers. Examples of industries in which we have significant experience include:
- Wealth Management/Financial Services
- Real Estate
- Investment Firms
Employees, independent contractors, and vendors are often required to sign restrictive covenant agreements, which can include non-competition, non-solicitation, and non-disclosure of confidential information provisions. Post-employment restrictions are often included in employment agreements. They are also sometimes included in shareholder agreements, equity agreements, and even employee handbooks.
Restrictive covenants can have life-changing implications for the lives of individuals who sign them. Non-compete provisions generally prohibit an individual from working in the same line of business within a certain geographical area for a period of time. Non-solicit provisions generally prohibit an individual from soliciting the company’s customers, prospects, or employees. In the context of the sale of a business, restrictive covenants may prohibit the seller from starting a similar business for a long period of time.
At Premier Litigators, we have attorneys who are highly credentialed and experienced in non-compete and trade secret laws. We represent clients in non-compete and trade secret disputes nationwide. Below is more information about our attorneys, examples of cases we have handled, and non-compete Frequently Asked Questions.
WHY HIRE PREMIER LITIGATORS
It is important to hire a law firm and a lawyer who specializes in the legal matter at issue. At Premier Litigators, we have lawyers who are not merely specialists in non-compete and restrictive covenant law — they are leaders in the field. For example:
- Our attorneys regularly provide non-compete counseling services to clients. Our attorneys have collectively represented hundreds (if not thousands) of individual and business clients relating to non-competes and other restrictive covenants. These services range from advising on the enforceability of restrictive covenants, mitigating potential liability for starting a competing business when subject to restrictive covenants in employment agreements, and negotiating non-compete restrictions to avoid exposure to lawsuits, to prosecuting and defending injunction hearings, and defending non-compete and trade secret lawsuits through trial.
- Our attorneys are award-winning and highly respected in the legal community. For example, most of our attorneys have obtained an “AV” rating by Martindale Hubbell (a peer-reviewed rating), been honored by Super Lawyers (a peer-reviewed rating), and are listed in Best Lawyers (peer-reviewed rating). Clients are regularly referred to us by other attorneys and even judges.
- Our non-compete attorneys are not only specialists — they are leaders in the field. For example, our law firm publishes extensively on matters of competition law and employment law, including non-compete agreements. Our attorneys regularly provide seminars to train companies and other attorneys on the nuances of non-compete laws.
- From top to bottom, all of our attorneys are highly credentialed. All attended top U.S. law schools. Many of our attorneys obtained federal clerkships following law school. Federal clerkships are considered very prestigious and difficult to obtain. All our attorneys are driven and dedicated to perfecting their craft.
We also do not rest on our laurels. Every month, our attorneys engage in educational panels aimed at staying abreast of non-compete and trade secret law legal developments and cutting-edge practices.
WHAT WE HANDLE
Representing Individuals. Examples of non-compete and trade secret issues we are regularly retained by individuals include:
- Assessing whether a non-compete or non-solicit is enforceable and, if so, the extent of its enforceability.
- Providing guidance on what actions would and would not violate a particular non-compete or non-solicit, particularly in the context of individuals considering taking a job with a competitor or starting their own business.
- Responding to cease-and-desist letters.
- Defending against lawsuits seeking to enforce restrictive covenant agreements, including handling injunction hearings.
- Filing Declaratory Judgement Actions seeking to hold agreements unenforceable.
Representing Companies. With respect to businesses, creating and rolling out appropriate restrictive covenants and ensuring compliance with such agreements are mission-critical business needs, especially non-solicits and non-disclosures for certain key employees and owners. Navigating non-compete strategies is particularly important in today’s business climate in which non-compete agreements are criticized by the employees and the public and more highly scrutinized by the government and many judges.
Businesses regularly rely on us to address the following types of restrictive covenant issues:
- Drafting employment agreements, independent contractor agreements, and restrictive covenants for owners, employees, contractors, and vendors.
- Strategizing on the choice of law and venue selection provisions for multi-state employers, as court enforcement of non-competes can vary significantly from state to state, as noted by the U.S. Department of Treasury Report .
- Providing practical guidance to companies on active steps they can take to ensure restrictive covenants remain enforceable, as well as preparing effective cease and desist letters for non-compliance.
- Assessing whether restrictive covenants were violated, or trade secrets were misappropriated.
- Providing guidance on detecting theft of proprietary business information.
- Counseling businesses on hiring individuals who have restrictive covenants or possess proprietary business information.
- Prosecuting legitimate claims of violating a non-compete or non-solicit agreement, trade secret misappropriation, and other claims relating to unfair competition.
REPRESENTATIVE CLIENT WORK
We have represented hundreds of clients concerning non-compete agreements and related competition-related litigation. Here are some examples of litigation and counseling services:
- Obtained complete dismissal of a lawsuit filed in Pinellas County, Florida against a former Florida-based sales professional for an industrial solar company asserting claims of unfair competition, trademark infringement, breach of fiduciary duty, unjust enrichment, and unfair and deceptive trade practices.
- Represented an insurance agent who left a large, national insurance company based in West Palm Beach, Florida to start a new agency. After a national insurance company threatened to sue, we filed a federal lawsuit on behalf of the agent seeking unpaid wages and a declaration that restrictive covenants, including non-compete and non-solicit, were unenforceable. The case was then quickly settled, with the national insurance company ending threats to sue, paying substantial unpaid wages to the client, and obtaining attorney fees.
- Defended a medical equipment company and certain sales employees of that company in multi-state federal lawsuits in Florida and Maryland, involving claims of breach of contract regarding non-compete agreements, tortious interference, and civil conspiracy. The opposing party, a national medical equipment company, originally sought over a quarter million in damages and to enforce two (2) years of a non-competition agreement against the sales employees. Prior to the injunction hearing in federal court, the parties resolved the case with no damages being paid to the national medical equipment company and a dramatic narrowing of the restrictive covenants, which enabled the new company and sales employees to continue with their new competing business.
- Obtained complete dismissal of a federal lawsuit filed in Atlanta, Georgia by a national property management recruiting agency against several former employees asserting claims of unfair competition, breach of contract, violation of the Lanham Act, defamation, tortious inference, Georgia RICO, and federal RICO.
- Successfully defeated a Florida-based trucking logistics company’s motion for an injunction against the seller of the company. The plaintiff trucking company alleged that the seller violated the non-competition provision in a purchase agreement in connection with the seller’s family (but not the seller) opening a competing trucking logistics company. We defeated the motion for an injunction, subsequently obtained a complete dismissal of the lawsuits, and won attorneys’ fees and costs.
- Defeated national salon franchise seeks a temporary injunction against a former salon stylist in Sarasota, Florida.
- Obtained a substantial settlement on behalf of a Florida hospital against former pediatrician who opened a competing practice less than five miles from the hospital and directly solicited hundreds of former patients in violation of the physician’s non-competition and non-solicitation provisions in the employment agreement.
- Obtained temporary injunction for a national home health care agency based in Miami, Florida against several Miami and Fort Lauderdale sales professionals who started a competing company and solicited clients while still employed by the home health care agency.
- Represented Tennessee-based c-suite sales executive of a national healthcare company when a prior employer filed a lawsuit seeking a temporary injunction and substantial damages.
- Obtained temporary injunctions in Miami, Florida on behalf of a national weight-loss supplement company against several physicians who breached non-competition and non-solicitation provisions and violated trademark laws.
Counseling & Negotiation Examples
- Negotiated over 100 employment agreements, restrictive covenant agreements, and severance agreements on behalf of highly compensated individuals, including sales professionals, financial advisors, high-level executives, physicians, in-house counsel, equity employees, and owners of start-ups.
- Negotiated on behalf of a national fitness gym franchise to hire a general manager who worked at another national fitness gym franchise and had a non-compete, non-solicit, and non-disclosure agreement. Prior to our involvement, the fitness facility had threatened to sue and sought substantial damages. After we were retained and negotiated, the settlement resulted in our client’s hiring the general manager, no lawsuit, and paying less than 10% of the original demand.
- Routinely recover substantial damages for clients who were threatened with non-compete lawsuits after determining their former employer did not pay them properly under state or federal wage laws.
- Routinely counsel large and medium-sized companies on hiring employees who are subject to restrictive covenants, including responding to cease and desist letters from prior employers.
- Routinely counsel large and medium-sized companies on cutting-edge practices for drafting restrictive covenants. This is particularly important in today’s climate, where savvy companies must balance protecting legitimate business interests while not offending current employees or determining potential employees through overbroad or unnecessary non-compete provisions.
NON-COMPETITION AND NON-SOLICITATION LAW – THE BASICS
The laws that govern the enforceability of workplace restrictive covenants (i.e., non-competes, non-solicits, and non-disclosure of confidential information) vary from state to state. There is no overarching federal law. In a handful of states, non-compete agreements are unlawful or only allowed under narrow circumstances.
The reason that workplace non-compete and non-solicits are not allowed under any circumstances is because they are generally prohibited by state anti-trust laws, i.e., they are technically restraints on trade.
All states have some level of restrictions on the use of workplace non-competes and non-solicits. In most states, however, non-compete and non-solicit agreements are generally allowed when: (i) the employer has a legitimate business interest in the agreement, and (ii) the restrictions are reasonable in time and geographic scope.
What constitutes a “legitimate business interest” varies slightly from state to state. In most states, it includes interests such as:
- Protection of confidential information
- Protection of substantial customer (or patient) relationships or substantial prospective customer (or patient) relationships
- Highly specialized training provided to the employee or contractor
- Protection of intellectual property rights
- Protection of good-will associated with a geographic marketing area
Many states also require that any restrictive covenant agreement (i.e., non-competes, non-solicits, non-discloses) be signed by the person against whom enforcement is sought. In other words, in those states, if an employee doesn’t sign the agreement, it is not enforceable.
The extent to which a non-compete or non-solicit agreement is enforceable and the defenses available are highly dependent on state law. At Premier Litigators, we represent clients in non-compete lawsuits nationwide, and we have one or more lawyers who specialize in non-compete law in the following states:
To see our Non-Compete Frequently Asked Questions that are specific to certain states, please click on the state you want: Florida, Georgia, and Michigan.
We also provide general non-state-specific non-compete FAQs below.
FREQUENTLY ASKED QUESTIONS
It depends on the applicable state law and the context. In most states, a company that wants to enforce a non-compete or non-solicit agreement (which are both types of restrictive covenants) against a former employee or contractor must demonstrate:
- The agreement is in writing and signed by the person against whom enforcement is sought.
- The existence of a legitimate business interest. The phrase “legitimate business interest” is a legal term of art, whose precise definition varies by state law. In most states, a legitimate business interest includes the protection of (i) trade secrets or other confidential information that has value, (ii) substantial relationships with specific prospective or existing customers or patients, (iii) customer or patient goodwill associated with certain intellectual property, such as trade names, trademarks, service marks, trade dress, or associated with a specific geographic location, or (iv) extraordinary or specialized training.
- The restraint at issue, such as the non-compete or non-solicit, must be reasonably necessary to protect the legitimate business interest justifying the restriction.
There are also a few states, such as California, that consider non-compete agreements unlawful between an employer and employee, with limited exceptions.
The requirements a company must satisfy to enforce a restrictive covenant, as well as the defenses available to an individual, vary by state law. In general, however, there are many legal defenses against the enforcement of a non-compete or non-solicit agreement. For example:
- Overbroad. The scope of the non-compete or non-solicit may be overbroad in geography or time.
- Not Competing. A business generally is unable to enforce a restrictive covenant against an individual who is not engaging in competitive activities.
- Unclean Hands. Some states will consider equitable defenses, which means a court will take into consideration unlawful or improper actions taken by the business seeking to enforce the agreement.
There are many other potential defenses. For more comprehensive information on how to defend against non-compete and non-solicit agreements, view our Insights article Best Practices for Defending Against Non-Compete Agreements
Legal remedies available to a business enforcing a restrictive covenant, such as a non-compete or non-solicit agreement, generally include:
- A temporary and permanent injunction
- Attorney fees and costs
- Monetary damages
Additionally, a business may be able to assert claims other than for breach of contract, such as tortious interference or statutory claims of unfair and deceptive business practices or unfair competition. Depending on the claims asserted, a business may be able to recover treble damages or punitive damages.
If an individual subject to a restrictive covenant works for a new employer that is competitive with the former employer, then the former employer may also be able to sue the new employer for damages.
It depends on the governing state law. In most states, restrictive covenants, such as non-competes, non-solicits, and non-disclosures, are enforceable even if an employee signed the agreement after starting employment. The legal reasoning is that continued employment is considered sufficient consideration to the employee for the employer to have a valid contract. In some states, however, a restrictive covenant is not valid if signed after starting employment, unless the employer has satisfied additional requirements under the relevant state law.
A temporary injunction stops a party from engaging in certain conduct – such as violating a non-compete agreement – until the final resolution of a lawsuit. When filing a lawsuit to enforce a non-compete agreement, often the former employer asks the court to immediately issue an injunction against the former employee or contractor who is competing.
In federal courts, a temporary injunction is called a preliminary injunction. Regardless of the name, the purpose is the same: to obtain an injunction during the pendency of a lawsuit.
When looking for a non-compete lawyer, you are encouraged to compare the background of the lawyers you are considering. Consider subject matter expertise, educational background, past results, and what references say about their own experiences. We are glad to share references.
We handle all restrictive covenant disputes throughout Florida and Georgia.