Understanding Florida Law Regarding Non-Compete Agreements
An increasing number of employers are asking new employees to sign non-compete agreements, The New York Times reports. While non-compete agreements have traditionally been used in fields with tightly held secrets—such as technology, sales and some corporations—they are now cropping up in a wide variety of other areas as well. Employees in Florida should be aware of what a non-compete agreement is and what Florida law says about non-compete agreements.
The laws regarding non-compete agreements vary from state to state. Two states—California and North Dakota—bannon-compete agreements entirely, while other states—including Florida—place some limits on them.
“Non-compete Agreement” Defined
In simple terms, a non-compete agreement is a contract in which an employee agrees not to compete with the employer—often by starting a competing business or going to work for a competitor—for a stated period of time after termination of employment.
In Florida, a non-compete agreement is also known as a “restrictive covenant.
Florida Law Regarding Non-compete Agreements
Per Section 542.335 of the Florida Statutes, a court will not enforce a non-compete agreement unless it is in writing and signed by the employee.
A non-compete agreement must also be reasonable in time, area and line of business.
Further, the employer who is seeking enforcement of a non-compete agreement must establish that one or more legitimate business interests justifying the non-compete agreement exist. A non-compete agreement that is not supported by a legitimate business interest is unlawful, void and unenforceable.
“Legitimate business interests” include, but are not limited to, the following, per the statute:
- Trade secrets, as defined in Section 688.002(4) of the Florida Statutes;
- Valuable confidential professional or business information that does not qualify as a trade secret;
- Substantial relationships with specific prospective or existing customers, patients or clients;
- Customer, patient, or client goodwill associated with:
o An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”;
o A specific geographic location; or
o A specific trade or marketing area.
- Specialized or extraordinary training.
The employer who is seeking to enforce the non-compete agreement must also establish that the language in the non-compete agreement is reasonably necessary to protect his or her legitimate business interest(s).
The statute also provides several rebuttable presumptions regarding how long the enforcement period for a non-compete agreement should last.
Challenging a Non-compete Agreement
The Florida Bar Journal outlines some ways in which an employee can challenge a non-compete agreement.
Per the statute, an employee may challenge a non-compete agreement by establishing that the agreement is overbroad, overlong or otherwise not reasonably necessary to protect the legitimate business interests of the employer. In such cases, a court shall modify the restraint and grant only the relief reasonably necessary to protect such interest(s).
Those statutory defenses are not the only grounds for challenging a non-competeagreement, however. Common law challenges to non-compete agreements also exist, including looking for a material breach on the part of the employer.
Employees face many questions and concerns when it comes to non-compete agreements. If you are an employee in Florida who is considering signing or has signed a non-compete agreement, consult with an attorney at the West Palm Beach based Law Offices of Larry E. Bray, P.A. for help.