Burr & Forman

05.18.2017   |   Blog Articles, Florida, Non-Compete Trade Secrets Law

LeBron, Stephan and the Essence of Florida Non-Competes

As this blog post goes to press, the Cleveland Cavaliers and the Boston Celtics just began their series to determine which team will face the winner of the series between the Golden State Warriors and the San Antonio Spurs. To the surprise of very few, the Stephan Curry-led Warriors are leading the Spurs in the series and are widely expected to return to the NBA Finals. The LeBron James-led Cavaliers are expected to defeat the Celtics. (New Englanders widely disagree with this prediction, although the first-game blowout suggests the Cavaliers are playing with a champion’s confidence.) A Cavaliers series victory could set up a rematch of the pre-season division favorites.

You may wonder how basketball rivalries and the NBA playoffs relate to non-competition agreements Florida. It’s simple. Both Cleveland and Golden State loaded their teams with talent to out-perform the competition. Cleveland added LeBron James and Kevin Love to join Kyrie Irving. Together, the three of them form a consistent and formidable foundation for the Cavaliers’ success. Golden State pulled off perhaps an equally impressive coup. With the possibility of an immediate championship, Golden State lured Kevin Durant away from adoring fans (and away from NBA All-Star Russell Westbrook) in Oklahoma City.

Under the NBA rules, once a player is eligible for trade, there is very little that a team can do to stop that player from leaving to join a team that he prefers. Usually higher salaries incentivize players to move. However in the cases of LeBron James and Kevin Durant, other factors clearly were as important – perhaps more important – than financial gain. For James, the decision was whether to leave his championship team in Miami to return to his home state of Ohio. To the delight of Cleveland fans everywhere, not only did he return to Ohio, he brought Cleveland its first professional team championship in decades. Similar themes arose for Kevin Durant. The fan base in Oklahoma City gets well-deserved recognition. Kevin Durant was (one of) their superstars. Yet he left for the allure of a ready championship. OKC is a relatively new NBA team with no history of winning championships. Golden State, on the other hand, is a team two years removed from an NBA Championship. Its loss in last year’s finals to a Cleveland comeback did not sit well with players, fans and management accustomed to winning almost every game of the season.

In Florida, companies have the right to legally bind their “best players.” Florida law has specific statutes that make an exception to restraints of trade as it pertains to certain valuable and high-level employees. Under these statutes, private employers can agree with employees in writing to reasonable restrictions for future employment. These agreements are typically called non-compete agreements or non-competition agreements. Generally speaking, these agreements prohibit departing employees from working in direct competition to their former company for an agreed period of time. The more high-level and important the employee, the longer Florida law will allow the restriction period.

Like a contract for a basketball star, non-competition agreements in Florida are nuanced and take considerable skill and experience to properly negotiate and enforce. Florida courts will respect a well-drafted non-competition agreement. However these agreements are in derogation of the Florida common law that encourages free enterprise and generally forbids the restraint of trade. As a result, successful enforcement is more likely if an employer specifically crafts a non-competition agreement to protect a discernible and legitimate business interest 1) within a reasonable restricted area; and 2) for a reasonable period of time.

If protecting your all-star makes sense to your business, then consider consultation on whether your company can benefit from a non-competition agreement. If you’re wondering whether or not Kevin Durant made the right decision, that’s a question for which Florida law has no specific statute.

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