Religious Institutions: October 2015

Nathan Adams IV is a Partner in Holland & Knight's Tallahassee office

Timely Topics

A non-compete clause, covenant not to compete or restrictive covenant is a contract provision under which one party agrees not to enter into or start a similar profession, trade or business in competition with another. For-profit employers commonly require them of employees, franchisors require them of franchisees, and buyers require them of sellers of businesses. Whether nonprofits can demand non-compete agreements is unsettled in several jurisdictions. Businesses have a legitimate interest in protecting their valuable proprietary and confidential information and in not having to compete against persons formerly associated with them who may use their trade secrets against them. Covenants not to compete prevent employees from bringing the customers from their old job to their new job, and they also prevent sellers of businesses from opening a location down the street to compete