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The Connection Between Trade Secrets and Noncompete Agreements in Florida - Reyes Law Group

The Connection Between Trade Secrets and Noncompete Agreements in Florida

For many businesses, trade secrets are an extremely valuable asset. The dilemma that many companies face is that they need to have their employees, and possibly even contractors or vendors, use these trade secrets in their day-to-day work. Those individuals could then take those secrets and share them with competitors if they left or were fired from their position. To mitigate this risk, companies in Florida can benefit from having all their employees sign noncompete agreements.

What Is a Noncompete Agreement?

A noncompete agreement is a contract that an employee, vendor, contractor, or other individual signs that legally prevents them from using the knowledge they gain from their workplace to start their own business, or work for a competitor that would benefit from the knowledge. By putting these types of restrictions on these individuals, the trade secrets they learn while working for the company remain with the company. A noncompete agreement can either be a standalone contract, or employers can add a noncompete clause to any full employment contract.

What are Trade Secrets?

When considering a noncompete agreement, it is essential to understand what trade secrets are. Not everything a company makes, does, or knows can legally be considered a trade secret. The following are examples of valid trade secrets:

  • Formulas – Secret formulas can be recipes for foods, for medicines, or any number of things.
  • Designs – Designs for products are almost always considered trade secrets.
  • Patterns – Patterns are often considered trade secrets. This can include logos.
  • Processes or Practices – The way work is done may be a trade secret if it is sufficiently innovative. An iconic example from history would have been when Ford developed the automotive assembly line.
  • Custom Tools – Some companies have created custom tools to do a specific task. These can be considered trade secrets.

A general rule of thumb is that anything that another individual or company does not know, and could not reasonably ascertain on their own, can be considered a trade secret. You should always consult a knowledgeable and experienced business attorney in Florida like Reyes Law Group for what things could be considered a trade secret.

Enforcing a Noncompete Agreement

Most people don’t violate their noncompete agreements, which makes them very effective. When someone does, however, it is important to know how they can be enforced. If someone discloses trade secrets to another company, it is possible to take both the individual, and in some cases, the other company to court for damages. If the courts find that the agreement was violated, they can award damages to cover the loss. The employee will also likely lose their new job in these situations.

Writing a Valid Noncompete Agreement

When it comes to noncompete agreements, it is important to ensure they are properly written so they can be enforced. There are many laws and restrictions in place regarding what can and can’t be in these types of agreements. Contact Reyes Law Group to work with experienced attorneys for all your business law needs.

Written by Reyes Law Group