When Is a Non-Compete Agreement Enforceable in Florida?

 Posted on September 14, 2021 in Business Law

Operating a business will involve interactions with a variety of other parties, including customers, vendors, other companies, and employees. There are many situations where disputes involving these or other parties may arise. Business litigation may be necessary to resolve these issues and address losses that a company may have experienced because of other parties’ actions. If disputes related to non-compete agreements become an issue, business owners will need to understand how the law applies to these situations and how they can enforce the terms of these agreements.

Enforcing Restrictive Covenants in Florida

Non-compete agreements are often used in employment contracts or severance agreements, and they are meant to ensure that a former employee will not directly compete with their employer and use their knowledge of a company’s operations or customers in a way that negatively affects the company’s business interests. They may also be used in other situations, such as a joint venture agreement between two companies. Non-compete agreements are known as restrictive covenants because they restrict a person from working for a competitor or engaging in certain types of business activities.

If disputes involving non-compete agreements arise, Florida law details the requirements that must be met for an agreement to be enforceable. These include:

• An agreement must protect a person’s or company’s legitimate business interests. These may include a company’s trade secrets, other proprietary or confidential information, its relationships with customers or clients, or the goodwill a business has built related to its professional practices, trademarks, geographical location, or position in the marketplace.

• An agreement must cover a reasonable period of time during which the restrictions apply. Restrictions against former employees or independent contractors may be reasonable if they last between six months and two years. Restrictions against former distributors, licensees, or franchisees may be reasonable if they last between one and three years. Restrictions against a former owner or partner of a business may be reasonable if they last between three and seven years. Restrictions that are necessary to protect trade secrets may be reasonable if they last between five and 10 years.

Most of the time, a party that is protected by a non-compete agreement can ensure that the agreement is enforceable by demonstrating that its restrictions are reasonably necessary to protect its business interests. When arguing that an agreement should not be enforced, a person will need to show that the agreement is too broad, lasts too long, or otherwise places restrictions on them that are not reasonably necessary. For example, a person may seek to have a non-compete agreement invalidated if it restricts them from working in a geographical area where their former employer does not conduct business.

Contact Our Broward County Business Litigation Attorneys

If you are involved in a dispute related to a non-compete agreement as either a business owner or former employee, The Elliot Legal Group, P.A. can provide you with representation and help you resolve this matter in a way that protects your interests. Contact our Plantation, FL business litigation lawyers at 754-332-2101 to get legal help with your case.

Sources:

https://www.flsenate.gov/Laws/Statutes/2018/0542.335

https://www.floridabar.org/the-florida-bar-journal/floridas-noncompete-statute-reasonable-or-truly-obnoxious/