Florida Noncompete Agreements

Florida law generally proscribes contracts in restraint of trade or commerce.  Notwithstanding, the Florida Legislature has created Section 542.33, Florida Statutes, affording a limited exception to the prohibition against unlawful restraints of trade. This exception (among many) contained in 542.33, is the exception allowing certain employment agreements against competition. These agreements are subject to limitations in time and geographical area.  Pursuant to 542.33, Florida courts shall determine whether the restrictive covenant provides reasonable protection for legitimate business interests in its determination of whether it is enforceable. Covenants not to compete which protect trade secrets and customer lists are considered legitimate business interests which may be protected and provide a basis for a presumption of certain requirements for relief. In order to survive judicial scrutiny, in generating noncompete restrictive covenants, employers must consider the following statutory criteria:

• The agreement must be completed in writing and signed by the person against whom the enforcement is sought.
• The person seeking enforcement of a restrictive covenant shall state and prove the existence of one or more legitimate business interests justifying the restrictive covenant.
• Legitimate business interests include: trade secrets, 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.

Limitations in time are factual questions to be determined by the trial courts. Courts are then directed to presume reasonable in time any restraint 3 years or less in duration and shall presume unreasonable in time any restraint more than 7 years in duration.  However, many courts have found certain time provisions within the generally accepted time brackets to be unreasonable.

In their determination if reasonableness in restrictive covenants not to compete, courts initially will consider the express time and geographical limitations; however, courts must employ a balancing test in which to weigh an employer's interest in preventing competition against the restraining effect on the employee. The better method in which corporations should employ is to create the agreement that will protect their legitimate business interests, using the minimum time frame and geographic areas necessary to protect the company's legitimate interests.  Where a company's presence is considered to be Nationwide, a blanket geographical non compete restrictive covenant cannot be guaranteed to be enforced.  It may be wiser to construct a Non-disclosure restrictive covenant to which courts afford a broader interpretation.