As a Florida business owner, you will probably want to do what you can to ensure your employees can’t unfairly poach clients or use your proprietary information in a competing business. One way you may choose to protect your operation is by using a non-compete agreement. However, before using this type of contract, you need to know: Are non-compete agreements enforceable in Florida?
What is a Florida Non-Compete Agreement?
In business, it’s essential to remain competitive. While it’s generally acceptable for entities to sell the same products or services, it’s important to ensure that there is a level playing field. Some employers may choose to help maintain this balance by using non-compete agreements.
What is a non-compete agreement? A non-compete agreement is a legally-binding instrument that employees sign promising not to work in a competitive capacity for a certain amount of time after leaving their employment.
Florida Law and Non-compete Agreements
Florida law states that to be enforceable, employee non-compete agreements must be “reasonable in time, area, and line of business.”
These agreements must also be:
What is a Legitimate Business Interest?
Florida law defines a “legitimate business interests” for a non-compete agreement as being:
Florida law defines a “legitimate business interests” for a non-compete agreement as being:
- Trade secrets, as defined in Florida Statute 688.002(4).
- Valuable confidential business or professional information that otherwise does not qualify as trade secrets.
- Substantial relationships with specific prospective or existing customers, patients, or clients.
- Customer, patient, or client goodwill associated with:
- An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”;
- A specific geographic location; or
- A specific marketing or trade area.
5. Extraordinary or specialized training.
Under the law, “[a]ny restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.”
What is a Reasonable Amount of Time?
Generally speaking, a court will consider less than two years to be a reasonable amount to restrict a former staff member’s post-employment activity.
Specifically, the law provides that when assessing the reasonableness of the duration of a non-compete agreement, when an agreement does not concern trade secrets, “a court must presume that in the case of a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, and not associated with the sale of all or a part of the business, shares, partnership interests, a limited liability company (LLC) membership, or equity interest:
a court shall presume reasonable in time any restraint 6 months or less in duration and shall presume unreasonable in time any restraint more than 2 years in duration.”
What kinds of Post-Employment Activity Can be Restricted?
Determining the types of post-employment activity that can be restricted is often complicated. If the agreement is too broad, it may be unenforceable. For instance, prohibiting an employee from working in any job within your industry is not likely to be considered reasonable. However, if your former employee was a software designer, for example, and your agreement was specific to that job, that restriction may be considered enforceable.
Determining the scope and non-compete agreement language can be complex. If you plan on having your employees enter into a non-compete agreement, you should consult with a Florida business attorney to help ensure you are using enforceable terms that protect your interests.
Contact an Experienced Florida Business Attorney
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent small business clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.