Florida courts routinely enforce non-compete clauses in contracts with employees, contractors, and consultants. But the non-compete clause must meet certain standards of reasonableness before it can be enforced. It must also support a legitimate business interest since an injunction against the employee essentially robs that employee of the freedom to choose where to work.
Here is a guide to the enforceability of non-compete clauses in the state of Florida.
When to Use Non-Compete Clauses
Businesses invest a lot into their employees. They provide training, introduce them to important contacts, and trust them with some of their most guarded secrets. When an employee leaves, a business may suffer due to the loss. But the business may also suffer if the employee opens a competing business or joins a competitor with all the information and contacts gained at the original place of employment.
Non-compete clauses are intended to address this problem. Non-compete clauses are not meant to scare your employees out of quitting or to bully them if they do.
Judges often express skepticism over non-compete clauses, especially provisions that are unnecessarily broad or restrictive. As a result, you will probably need to limit non-compete clauses to those employees who can truly damage your business by competing with it. You will also need to be prepared to explain why you need to restrict your employees’ post-termination employment.
Legitimate Business Interests
A non-compete clause must protect a legitimate business interest. Florida courts will not restrict employees who would not harm your business by moving to a competitor. For example, a court would say that you have no legitimate business interest in enforcing a non-compete clause against a janitor, factory assembler, or other types of manual laborers.
But under Florida law, a business does have a legitimate business interest in protecting itself from employees who have:
- Special training
- Connections with customers and vendors
- Trade secrets
- Confidential business information
- Goodwill in the industry
Courts will generally accept that an employer can restrict an employee with these unique characteristics.
Reasonableness in Time and Scope
Once a court determines that the employer has a legitimate business interest in restricting a specific employee, the court will look at the non-compete clause. Even if the employee has the knowledge, training, and connections that could justify a non-compete clause, a court will not enforce unreasonable non-competition terms.
A non-compete is considered to be reasonable if the time and scope shown are reasonable.
The duration of the non-compete must allow the employee to rejoin the workforce after a reasonable amount of time. Florida has no bright-line test for the definition of a reasonable amount of time. This is primarily because the reasonableness of the duration depends on the scope, and vice versa.
A highly restrictive scope might only be enforceable for a short period. Conversely, a looser scope might be enforceable for a longer amount of time. If you tell a concierge not to work as a concierge for any hotel in Florida, you will probably need to have a very limited duration for a court to enforce it.
But if you only restrict the concierge from working as a concierge for five-star hotels in Miami-Dade County, you could probably have a longer duration enforced.
The scope encompasses both the job and the geographic area for enforcement. In examining the scope of a non-compete for reasonableness, the court will look at restrictions on:
- Types of employers
- Types of work
Limiting the non-compete to direct competitors, the same or comparable jobs, and the same geographic area will improve the likelihood of enforcement. Expanding beyond direct competitors, similar jobs, and the local area could risk invalidation by a judge.
Contact the Frazer Firm
We can help businesses to write enforceable non-compete clauses, enforce a non-compete clause against a former employee, and defend against breach of non-compete claims. Contact the Frazer Firm to schedule a consultation to discuss your non-compete issue.
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