Florida's Statutory History for Non-Compete Agreements

posted by David Goldman  |  Jul 24, 2009 1:00 PM [EST]  |  applies to Florida

Florida law governing non-compete agreements has gone through three major variations since 1953. The enforceability of a covenant not to compete under Florida law is governed by the law in effect at the time the agreement was entered into. (Bradley v. Health Coalition, Inc., 687 So. 2d 329, 331 (Fla. 3d DCA 1997). The three periods of time are:

  1. Prior to 1953
  2. 1953 - 1996
  3. 1996 - Present
Most non-competition agreements were entered into after 1996 and are therefore evaluated existing law. 

Modern Florida Non-competition Law

Today, Florida courts evaluate non-competition agreements using the following factors.
  • Courts should construe restrictive covenants in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement.
  • Violation of a restricted covenant that is enforceable creates a rebuttable presumption of an irreparable injury.

Florida Rules for Valid Noncompete Agreements

  1. A written agreement signed by the party against whom enforcement is sought;
  2. the existence of one or more legitimate business interests justifying the restrictive covenant, and
  3. that the contractually specified restraint is reasonably necessary to protect the established interest of the employer. Recognized employer interests include:
    1. trade secrets;
    2. valuable confidential business or professional information that does not qualify as a trade secret;
    3. substantial relationships with specific prospective or existing customers, patients, or clients;
    4. customer, patient, or client goodwill associated with an ongoing business, a specific geographic location, or a specific marketing or trade area; and
    5. extraordinary or specialized training.
  4. The agreements are enforceable to the extent that they are reasonable in time, geographic area, and scope of business.
Courts have enforced non-competition agreements against many professionals, including accountants, business owners, franchisers, sales people, managers and marketing executives. Attorneys, however, may not offer or participate in agreements that restrict an attorney's right to practice or they will lose their right to practice law in Florida.

Florida Trade Secrets

Often agreements attempt to define information that is not a trade secret as a Trade Secret.  Florida statute 688.02 defines a trade secret as information, including a formula, pattern, compilation, program, device, method, technique, or process that:

a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

General information about a company is not a trade secret just because they call it a trade secret.  Also, information that is commonly known in the industry and not unique to the injured party claiming injury is not confidential and not entitled to protection.

As a general rule, individual employees should avoid signing a non-competition agreement whenever possible. If a non-competition is absolutely necessary for a desired job, care must be taken before signing to negotiate its scope down to an acceptable level.  Consulting an employment lawyer experienced with non-competition agreements before signing it will save you thousands of dollars in legal fees or lost opportunities later.

External Links

Links to external sites with additional information about this topic.

posted by David Goldman  |  Jul 24, 2009 1:00 PM [EST]  |  applies to Florida

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