In Florida, non-compete agreements are valid if they are reasonable in time, area, and line of business. Back in the day, noncompete agreements were often found to be void as an improper restraint of trade. Nowadays, non-compete agreements are common but to be enforceable, they must: (1) be in writing; (2) be signed by the parties, and (3) specify a reasonable time.
What do non-compete agreements typically look like?
Noncompete agreements are contractual agreements between an employer and employee wherein an employee promises not to compete with his/her employer’s business during employment and for a specified time after the termination of such employment.
They can also include provisions wherein the employee agrees not to work for the employer’s competitors or to solicit the employer’s customers for a specific period of time.
Noncompete agreements can also be used in contracts between a buyer and a seller in the purchase of an ongoing business. The buyer will request a non-compete agreement to prevent the seller from starting a competing business, immediately after the sale.
In order to meet Florida requirements, every non-compete agreement must be in writing and signed by the person against whom enforcement is sought.
The party seeking enforcement for the agreement (usually the employer) carries the initial burden to plead and prove that the non-compete provision or contract is reasonably necessary to protect a legitimate business interest. If this is established, the opposing party (usually the employee) must then demonstrate that the restriction is overbroad, overlong, or otherwise not reasonably necessary to protect the established legitimate business interest.
What’s a legitimate business interest?
Under Florida law, legitimate business interests include the following: (1) trade secrets; (2) valuable confidential business or professional information; (3) substantial relationships with specific prospective or existing customers, patients, or clients; (4) customer, patient, or client goodwill associated with an ongoing business or professional practice, a specific geographic location, or a specific marketing or trade area; and (5) extraordinary or specialized training. However, it is well known that the non-compete cannot be used as a tool simply to eliminate competition.
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