Legal advice on non-compete agreements and employees

Question 1: Could I get into trouble for hiring my ex-employer’s client for contract work?

Generally, no. There is no law that prohibits someone from hiring an a former employer’s client. If you signed any agreements with the prior employer, however, it is important to ensure none of the agreements contain restrictive covenants that could potentially prohibit hiring the client, such as a non-compete or non-solicit provision. If you did agree to post-employment restrictive covenants, then it is prudent to discuss the matter with an employment or business attorney to assess whether hiring the client could pose a serious risks.

Question 2: Does a non compete agreement start on the first day of work?

Non-compete provisions typically require an employee to not compete during the course of employment, as well as for a period of time post-employment. Even without a non-compete provision, employees usually owe a duty of loyalty to their employer to not compete against their employer during their employment. How long a non-compete may last post-employment depends on the applicable State law. Most States limit non-compete provisions to one, two, or three years post-employment. Depending on the circumstances, however, a non-compete provision may not be enforceable at all.

Question 3: Can I sue my previous employer for releasing personal information?

It depends. Certain personal information like social security numbers, health information and the like may be protected by law. If you can trace the disclosure of your personal information to an adverse action against you (identity theft, etc), you may have a claim. If your former employer failed to take reasonable steps to protect your information that resulted in a data breach, you may have a claim against them.

Question 4: Can an employer who owes you back pay wait for the statute of limitations to be over and not pay?

Generally, yes, which makes it critical for employees that feel they are not or have not been properly paid to speak with counsel. Actions for back wages brought under the Fair Labor Standards Act are generally subject to a two-year statute of limitations, but that statute of limitations is extended to three years in the case of willful violations.

Question 5: I work in Tampa, Florida and I was wondering what is a reasonable length of time and a reasonable geographic scope for a non-compete agreement?

Florida non-compete agreements are governed by Florida Statute 542.335. First, under that statute, the length of time permitted for a non-compete depends on the context. For example, in the context of an employer and employee, if there are no trade secrets at issue, then a court will presume six months or less to be reasonable and two years or more to be unreasonable. In other contexts, such as a sale of a business, courts will presume reasonable non-competes that are even longer in duration. Second, the reasonableness of a non-compete geographic scope will depend on the facts. Specifically, Florida courts will consider whether the geographical scope at issue is supported by legitimate business interest. Finally, if the length of time or geographic scope are overbroad, Florida courts will modify the scope to only enforce a non-compete to the extent that it is reasonably necessary to protect the established legitimate business of the party seeking to enforce the non-compete.

Question 6: In Atlanta, Georgia how enforceable is a non compete clause in a Non Disclosure Agreement (NDA)?

It depends. Georgia non-compete agreements are governed, in part, by Georgia Code Title 13-8-55. Under that Georgia non-compete statute, whether a non-compete is enforceable depends on whether the party seeking to enforce it has one or more legitimate business interest in the non-compete. There are also many defenses to non-compete agreements in Georgia.

Question 7: Is a non compete agreement void if the company fails to renew its business license?

Not necessary, although it may depend on the applicable state law. For example, in Florida and Georgia, the non-compete statute lays out what is required to enforce a non-compete agreement and renewing a business license is not included as a requirement. However, the Florida and Georgia non-compete statutes do allow as a defense that the enforcing party is no longer in business or the same line of business at issue.

Question 8: If I have signed a noncompete as part of an employment agreement in Tampa, Florida; is there any way to legally void the non-compete if I move out of the state?

Generally, no, merely moving out of state does not void a non-compete agreement signed in Florida. However, moving out of state often means that the activities undertaken by a former employee will not violate a non-compete agreement. For example, when the agreement is limited to a geographical scope of Florida, then not engaging in competition within Florida would likely be allowed. Non-compete agreements can vary greatly. Therefore, it is important to let an experienced attorney assess the agreement to determine what actions would constitute a violation and to determine to what extent it is even enforceable.

Question 9: My company is based out of Tampa, Florida and I have a non-compete clause in my employment contract. Do I still need to have the employee sign an additional non compete agreement?

No. Under the Florida non-compete statute, a non-compete restriction is only enforceable if it is in writing and signed by the person against who enforcement is sought. In the situation you describe, the non-compete clause is in the employment contract and, therefore, satisfies the requirement that it be in writing. So long as the company always has employees sign the employment agreement, then it will be enforceable – assuming it satisfies the other requirements of the Florida statute.

Question 10: I am a physician who was supposed to start a job in Florida, due to COVID I was unable to start working so I will need to find another job. Will I still be held to the non compete agreement I signed if I never started work?

It is extremely unlikely. Among other requirements to enforce a non-compete agreement in Florida, an employer must demonstrate that it has a legitimate business interest in the non-compete with respect to the employee, including physician employees. Those include, for example, the physician having substantial relationships with patients or customers, access to confidential company information, substantial training, and patient or customer good-will associated with certain intellectual property. When someone is hired, but never actually begins employment, it is very unlikely that any of the circumstances above would be implicated.

Question 11: Can an employer require employees to use personal, un-paid, time to have automotive maintenance performed on company vehicles?

No. Under the Fair Labor Standards Act (FLSA), employees must be compensated for all “work” time. Work time is not limited to an employee’s work schedule, but instead includes all work that an employee is permitted or instructed to do. Thus, an employer requiring an employee to have maintenance performed on a company vehicle is considered work and must be compensated.

Question 12: Can my employer expect me to train for a new position without paying me the new position wage?

No. Under the FLSA, an employee must be paid for training time. As an exception to that rule, time spent training is not compensable if all the following four criteria are met:

1. attendance is outside of the employee’s regular working hours;
2. the employee attendance is voluntary;
3. the course, lecture, or meeting is not directly related to the employee’s job; and
4. the employee does not perform any productive work during the training. However, if any of these four requirements are not satisfied, then the training time must be treated as work time.

Question 13: Can my former employer withhold my paycheck until I sign a noncompete agreement?

No. In fact, absent limited exceptions, an employer that purposely withholds a paycheck can be found liable for civil theft under Florida Statute 772.11. Withholding a paycheck is generally unlawful in every state. If your employer withholds a paycheck, you should contact an attorney immediately.

Question 14: If my employer changes the terms/ compensation of my employment, is my non-compete agreement still legally binding?

It depends, in part, on the details of the non-compete agreement. Some agreements have provisions that specifically state that any changes to the terms or conditions of employment do not affect the enforceability of a non-compete. Absent a provision like that, whether it is enforceable will likely depend on the magnitude of the change in the terms or compensation of employment. For example, if someone signs an agreement in the capacity of a sales employee, then changes to a non-sales role in a different department with much lower pay, the agreement may no longer be enforceable with respect to the new position. On the other hand, if an employee’s pay is reduced only a small amount, a court may not view that change as a prior material breach of the agreement justifying non-enforcement of the non-compete provision. Again, the answer to this question is very fact dependent.

Question 15: What to do when your boss demands you to sign a non-compete agreement?

When presented with a non-compete agreement, you should speak with an experienced employment attorney, who can walk you through the agreement and explain your options or negotiate on your behalf. If you cannot speak to an attorney, it is important that you carefully read the agreement to understand what you can and cannot do, because courts in many states, including Georgia and Florida, tend to liberally enforce non-compete agreements if they are or can be made compliant under state law. If you do not like the terms of the agreement, you can ask your potential or current employer to drop the agreement or change the agreement. But if they will not do this, you may be faced with a choice of whether the job is worth taking or keeping.

Question 16: Can we open a salon with our partner while under a non-compete?

It depends on what the agreement says and whether your salon would compete with a prior employer. An attorney can help you understand the limitations contained in the non-compete agreement.

Question 17: If my employer changes the terms/ compensation of my employment, is my non-compete agreement still legally binding?

Generally yes. Absent some other term in the non-compete agreement, an agreement will still be binding even if other terms of the employment agreement change.