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What do courts consider with restrictive covenant enforceability?

On Behalf of | Sep 6, 2022 | Contracts |

In Florida, there are many ways to protect a business and how it operates. When hiring employees and simultaneously shielding the business from future problems, contracts are crafted to keep those employees from taking part in certain activities through a restrictive covenant.

Employees will have access to the inner workings of the business. If they were to leave and set up a similar business using the inside knowledge they gained at their previous job, it could cause problems for the former employer. The contract is designed to prevent that. Still, despite the contract, there are many instances where the former employer believes a violation has taken place. It is essential to know what the court considers when deciding if a restrictive covenant is enforceable.

Factors the court will consider under the law with restrictive covenants

When the court assesses a restrictive covenant claim, it will look at certain aspects to determine whether it is enforceable. The person who is accused of violating the restrictive covenant might claim that they are being harmed economically or facing other types of hardship from the agreement. That is irrelevant to the court and it will not be considered when it comes to its decision.

The court will look at the businesses and make its decisions based on issues related to them. For example, if the defense for the alleged restrictive covenant violation is that the entity that is trying to have the agreement enforced is not working in that business anymore, then it could say the restrictive covenant no longer applies. If the changing or stopping of the business came about because of the violation, then the court can continue with the case.

Professional representation is key with restrictive covenants

Restrictive covenants are meant to ensure a business is not damaged by employees who are aware of its most sensitive information and use that knowledge to their advantage and the detriment of the former employer. Even with that, it is not automatic that it will be enforced. Every situation is different and from the perspective of the business or the person who is accused of violating the agreement, having legal assistance with business and commercial law can navigate this complex territory and find workable solutions to avoid long-term damage.