There is a lot of misinformation about non-compete agreements in Florida. The big questions typically stem from confusion about enforceability, time limits, scope, and exceptions.
Overall, certain types of employees, as well as parties to the sale of a business, may enter into an agreement not to compete in the same business for a specifically stated period of time after the employment relationship or the sale of the business ends. Generally, the courts will enforce non-compete agreements to the extent deemed reasonably necessary to protect the buyer’s investment in the substance of the business and/or to protect against unfair competition from a former employee against their former employer. A quick word to the wise, be careful because non-compete clauses are often buried deep within the fine print of employment agreements and/or business sales contracts.
Florida Statute 542.335, is the statute that governs non-compete agreements and more specifically, “covenants that restrict or prohibit competition.” This statute sets forth the categories of potentially protected information and certain guidelines for a reasonable time period of restrictions. The latter is usually based on the relationship of the parties and the burdens of proof for the parties seeking and opposing enforcement. This statute also establishes general instructions for the courts to interpret non-compete agreements.
For a non-compete agreement to be enforceable under Florida law, the agreement must focus on what will be required to enforce its terms, both from a practical and a legal standpoint. Although authorized by statute, non-compete agreements in Florida are subject to different standards as to what is considered reasonable, based on the bargaining positions that exist in different business relationships. In other words, does one party have superior negotiating power over the other? If so, that will likely be deemed unreasonable.
A person seeking enforcement of a restrictive covenant also shall plead and prove that the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction. If a person seeking enforcement of the restrictive covenant establishes prima facie that the restraint is reasonably necessary, the person opposing enforcement has the burden of establishing that the contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the established legitimate business interest or interests. If a contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest or interests, a court shall modify the restraint and grant only the relief reasonably necessary to protect such interest or interests. Fla Stat. 542.335(1)(c)
For a Plaintiff to enforce a non-compete agreement, he or she will often seek an injunction to force the Defendant to stop their harmful actions against the Plaintiff’s business. The four elements necessary to establish a temporary injunction are: (1) likelihood of irreparable harm and non-availability of adequate remedy at law; (2) a substantial likelihood of success on the merit; (3) the threatened injury to petitioner outweighs possible harm to respondent; and (4) granting of a temporary injunction will not disservice the public interest; in action to enforce non-compete agreement.
From the other perspective, a Defendant attempting to avoid a non-compete agreement will often try to establish that the agreement is unreasonable and therefore unenforceable within the guidelines established in the Statute that is quoted above. More specifically, to determine reasonableness, the courts will usually consider: (1) the general market or commercial field of the business; (2) the specific geographic area; (3) the time period associated with the typical life of a product or service common to the former and subsequent employers; (4) the time required to renew or update any confidential information a former employee received during employment; and (5) the time required to train a replacement employee.
Needless to say, these interpretations can be very intricate and cumbersome. The verdict can often come down to a few nuanced details and/or a well-crafted legal argument.
If you or your business wish to enforce a non-compete agreement or you feel that you or your business are stuck in an unreasonable non-compete agreement, Boatman Ricci is here to advise and assist you. The attorneys at Boatman Ricci can help you protect your rights and property. Contact us today to schedule an initial consultation at (239) 330-1494 or firstname.lastname@example.org.
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