yangerlawblog

Maybe There’s a Reason That Grass is So Green: A Take On Florida Non-Compete Agreements

In Uncategorized on November 2, 2011 at 3:02 pm

               A while back I got a call from a crusty old client (I think he’d enjoy that description) who has bought and sold a number of businesses over the years. This time he wasn’t buying or selling anything, just chuckling about a “rinky-dink employee with rinky-dink loyalty” or something like that. Seems one of his sales-dudes had bolted for greener pastures, ironic since Mr. Crusty also dabbles a little in cattle ranching.

               Anyway, Mr. Crusty has a love-hate relationship with me. He loves me but hates the fact that I’m a lawyer and that there are times he must concede he needs me. He loves to call and challenge me with some twisted contractual problem he’s found himself in and from which he is certain I can find him no way out. He hates it when I do find that way out (not really, but he likes to say so).

               So he calls all giddy about this sales-dude jumping ship and he can’t seem to stop laughing about it.

               “Did you have him sign that non-compete we wrote you last year?” I ask him.

               “Sure, but who cares?” he barks back.

               “Okay…and why wouldn’t you care? You know we can go to court and shut him down today.”

               “Cuz I don’t give a rat’s carcass if Dim-Bob hightails it outta here.”

               “Really?” I ask. “You don’t care if he starts competing for your customers?”

               He snorts another belly laugh and tells me, “Billy, Billy, Billy. Look son, I sell the best frikkin’ [widget] out there and nobody’s better at followin’ up than we are.”

               “Okay,” I say. “And?”

               “And sure, you got that non-compete about as air-tight as they get. But if I’m giving my customers any reason to buy from his lame self, then you know what? That’s on me, my boy. On me,” he says.

               “So you don’t want us to get an injunction from the court? It is not something we can wait on. Judges don’t like it when you wait. Kind of makes your claim look weak.”

               “Nope. Dim-Bob will figure it out soon enough.”

               “Figure what out?” I ask.

               “He’ll figure out the real reason the grass is greener over there.”

               “Right, greener. Okay, I’ll bite. Why is the grass greener?”

               “Manure.”

               “Manure? You mean, like, uh, sh…”

               “Exactly! That place is a pile of shee-it! Hah! Looks real nice from here but you get close and…woo-wee…they can stink it up!”

               Okay, so Mr. Crusty approaches business and competition a little differently than most but the anecdote does provide some lessons.

               Whether it’s the economy or just something in the water, we are seeing a jump in non-compete litigation of late. And in spite of a common misperception in the business community that non-competes are simply an unenforceable waste of time, Florida actually has one of the more aggressively enforceable restraint of trade statutes in the country.

               Granted, there must be a “protected business interest” (five of which are specifically listed in the statute) that the employer is seeking to protect and the document must be tailored reasonably as to length of time, geographic area and the scope of work covered. While Florida does require a judge to fix certain faulty non-competes, no judge is going to enforce a document that says Dim-Bob can’t sell widgets anywhere in the world for the next 50 years. But a properly drafted non-compete should withstand the scrutiny of the even pickiest jurist.

               Of course, each circumstance calls for its own cost benefit analysis as to what may be gained or lost by enforcing the agreement. Like Mr. Crusty, you may deem it unnecessary. But without an effective and valid non-compete in place there is no opportunity for such analysis.

               On the flip side, if you’re bound by a non-compete and start gazing longingly across the fence at that plush green pasture that awaits you, you might want to consider just why that grass is so green. And then go show the thing to a lawyer.

               All the best.

               Bill Yanger

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