In Florida, non-compete agreements are valid if they are reasonable in time, area, and line of business. In the past, we often saw noncompete agreements deemed void for being improper restraints of trade. These days, however, noncompete agreements are commonplace. For enforceability, these agreements need to meet three conditions. They must exist in written form, carry the signatures of all parties, and outline a reasonable timeframe.
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.
You can also find noncompete agreements in contracts. They occur between a buyer and a seller during a business purchase. The buyer will request a non-compete agreement to prevent the seller from starting a competing business, immediately after the sale.
For a noncompete agreement to meet Florida’s standards, it must exist in written form. The person it’s enforced against must sign it.
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. Once established, the opposing party, usually the employee, must show the restriction’s excessive breadth or length. Alternatively, they must prove it’s unnecessary to protect the 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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