Every business has the legal right to protect its interests against competitors and unauthorized third parties, especially practices, processes, patterns, or any other information that has inherent economic value due to their confidentiality.
When used accurately, restrictive covenants permit employers to protect their business interests while preserving the confidentiality of valuable information. In this article, you will have a full overview of Florida’s non-compete law.
What is a Florida Non-Compete Agreement?
Established either as a full contract or as part of an employment agreement, a non-compete agreement is a legal document in which one party (the employee) agrees not to engage in competing business activities against the other party (the employer).
Generally, most companies tend to use non-compete agreements with high-level employees who have contact with sensitive business information, such as proprietary formulas, unique production patterns, and other trade secrets.
Employers may enforce a non-compete agreement in Florida to prevent an employer to use knowledge and experience acquired at their expense to work for competitors or immediately start a competitive business upon leaving the company.
Under Florida law, the agreement’s enforceability will depend on whether the terms and clauses in the contract meet the statutory requirements.
Florida’s Non-Compete Law – Taking a Closer Look
Except under specific circumstances established by Florida law, “every contract, combination, or conspiracy in restraint of trade or commerce in this state is unlawful.” (Fla. Stat. §542.18)
Florida Statutes §542.335 sets forth the enforceability conditions of valid restraints of trade or commerce, including non-compete agreements.
The statute provides that the “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.”
As described by Florida Statutes §542.335 (1), “in any action concerning enforcement of a restrictive covenant:
- A court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought
- 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”
Florida Statutes §542.335(1)(b) expressly provide 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 state 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
To enforce a non-compete in court, an employer “shall plead and prove that the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction.” (Fla. Stat. §542.335(1)(c))