Non-solicitation agreements are legal contracts used by companies to prevent former employees from asking clients to follow them to a competing business. In layman’s terms, non-solicitation agreements prevent former employees from stealing clients from a company.
In this article, you will find out whether non-solicitation agreements are enforceable under Florida law.
Florida Non-Solicitation Agreements – Understanding the Concept
A non-solicitation agreement prevents employees from leveraging a company’s customers during or after the employment is over – either for their own benefit or the benefit of a competing business.
It is possible to include a non-solicitation clause as a part of a larger employment contract, which may include other restrictive covenants such as non-compete or non-disclosure clauses.
Considering open markets are strongly favored in US jurisdictions, state legislatures tend to disfavor restraints on trade and commerce. Florida’s legislature is not different. Unless expressly provided by state law, “every contract, combination, or conspiracy in restraint of trade or commerce in this state is unlawful.” (Fla. Stat. §542.18)
Are Non-Solicitation Agreements Enforceable in Florida? – The Verdict
As a restraint on trade, a non-solicitation agreement is only enforceable if the contractual terms comply with all related statutory requirements.
As provided by Florida Statutes §542.335 (1), “notwithstanding s. 542.18 (…), enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business, is not prohibited.”
Additionally, Florida Statutes §542.335 (1)(b) provides that “any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.” The term “legitimate business interest” includes, but is not limited to:
- Trade secrets (as defined by law)
- 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”
- Customer, patient, or client goodwill associated with a specific geographic location, or a specific marketing or trade area
- Extraordinary or specialized training
Enforcing Non-Solicitation Agreements in Florida – Key Elements
Shielding a Legitimate Business Interest
No court will enforce a non-solicitation agreement with terms established outside the boundaries of its business sphere. As described by Florida Statutes §542.335 (1)(b), “the person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant.”
Non-solicitation agreements with terms that are extremely restrictive are not enforceable. It is crucial to understand the difference between limiting an employee’s actions within a set timeframe and prohibiting them from having a chance to earn a living.
Statutory rules provide that cases involving “a restrictive covenant sought to be enforced against a former employee, agent, or independent contractor, (…) 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.”
The language used in a non-solicitation agreement must be sound, clear, and narrow. Restrictive covenants containing ambiguous, vague, or imprecise language may result in costly and time-consuming litigations.
No one-size-fits-all approach is sufficient to create an enforceable non-solicitation agreement in Florida. Instead, the best way is to draft a customized and narrowly tailored agreement to suit your company’s unique needs with the help of an expert contract lawyer.