Enforceability of Noncompete Agreements in a Remote Workforce
Today, many businesses are shifting their workforce from in-office positions to remote work. These remote positions have opened the door, and state lines, to hiring employees who reside outside of the state where the employer typically conducts business. As with traditional in-office positions, businesses frequently require the execution of noncompete agreements for remote workers to protect the employer from unfair competition. However, each state has its own laws when it comes to the enforceability of noncompete agreements. As a result, the same noncompete agreement may be enforceable against one remote employee, but unenforceable against another.
Using Noncompete Agreements for Remote Workers
Inevitably, this has created uncertainty for both employers and employees concerning the enforcement or defense of noncompete agreements for remote workers even when the agreement has a choice of law provision or forum-selection clause. Choice of law provisions or forum-selection clauses are used in contracts, including noncompete agreements, to determine which state’s law applies to the agreement. While this may be a good starting point, not every state will apply the state law in accordance with the choice of law or forum-selection provisions.
Noncompete Agreement Law
In Florida, a choice of law provision designating the law of a state other than Florida is generally enforceable if the law of the chosen state is not contrary to Florida’s public policy. Conversely, New York courts have held that a Florida choice of law provision in an employment agreement was unenforceable because Florida’s noncompete law was “truly obnoxious” to New York public policy. This is why it’s essential for employers hiring remote employees to consult with an experienced noncompete attorney to ensure they have enforceable noncompete agreements for remote workers in place. Alternatively, it’s important that remote employees understand their rights and obligations under the noncompete agreement with their employer.