1. Are non-compete, non-solicitation, and other restrictive covenant agreements valid under Florida law?
Yes. Florida has a statute that governs all post-employment restrictive covenants, including non-compete, non-solicit, and non-disclosure obligations. Florida permits the enforcement of such agreements as an exception to the state’s anti-trust statute. Florida Statute, § 542.335 Specifically, contracts that restrict or prohibit competition during or after an employment or business relationship are allowed so long as such contracts are:
- Reasonable in time, area, and line of business;
- In writing; and
- Signed by the person against whom enforcement is sought.
Additionally, the person seeking enforcement must plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant at issue, which can include:
- Trade secrets as defined under Florida’s trade secret statute;
- Valuable confidential business or professional information that does not qualify as a trade secret;
- Substantial relationships with specific prospective or existing customers, patients, or clients;
- Customer, patient, or client goodwill associated with:
- An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress;”
- A specific geographic location; or
- A specific marketing or trade area;
- Extraordinary or specialized training.
In Florida, a non-compete or other restrictive covenant agreement must be reasonable in terms of length of time and any geographic restrictions. What is reasonable for one industry may not be reasonable in another industry. For example, if a business only has and seeks clients in Miami-Dade County, Florida, it would likely be overbroad for a non-compete or non-solicit to extend beyond that county. Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.
2. I received a cease-and-desist letter about a Florida non-compete agreement – What do I do?
General guidance on how to address a cease-and-desist letter is provided in section three of this previous article: https://cantrellzwetsch.com/non-compete-fights-part-iii-best-practices-for-defending-against-non-compete-agreements/. At a minimum, an individual or competitor that receives a cease-and-desist letter should probably hire an attorney, preserve evidence, and provide a detailed response. When a cease-and-desist letter is ignored, the business sending it often assumes it is because the individual or competitor has no defense. In rare instances, it may also make sense to file a lawsuit in response to a cease-and-desist letter.
3. Can an employer refuse to provide a copy of a non-compete agreement and still try to enforce it?
Yes. Ask your employer or former employer for a copy of all employment agreements, including any restrictive covenant agreements. Failure to provide a copy will not prevent enforcement, provided the agreement is in writing and signed by the person against whom enforcement is sought, as the statute requires. Florida Statutes § 542.335(1)(a)
4. Can a Florida employer enforce a non-compete or restrictive covenant agreement against an employee even if it fired the employee?
Generally, yes, but not always. In Florida, unless the employment/restrictive covenant agreement expressly states otherwise, post-employment restrictions are generally enforceable regardless of why the relationship ended. However, if the employer breaches the contract or terminated an employee for an unlawful reason it may provide a defense to a former employee, or a valid counterclaim.
5. Is a non-compete enforceable if I am unable to work because of it, or the restriction covers a large area?
The Florida non-compete statute specifically provides that a “in determining the enforceability of a restrictive covenant” and court “shall not consider any individualized economic or other hardships that might be caused to the person against whom enforcement is sought.” However, a court is allowed to narrow the geographic scope of a non-compete agreement and enforce it as modified if the restriction is found unreasonable or overbroad. A court can also reduce the duration of the non-compete. This is a called “blue penciling.” Under Florida Statute 542.335(1)(d), the person opposing enforcement may have the ultimate burden to prove unreasonableness.
6. Is a Florida non-compete agreement enforceable if the employer requires me to sign it long after my employment began?
Yes. A non-compete agreement can be enforced regardless of when it was signed provided it is supported by consideration or something of value. An employer’s promise of continued employment is considered sufficient consideration in Florida. This is not true for all states.
7. Is it possible to informally end a non-compete agreement in Florida?
Depending on your relationship with your former employer, it may be possible to renegotiate the length or geographic scope of a non-compete agreement. Often, the best time to do this is during exit negotiations. For employment with a particular employer, there can be a “carve-out” to allow the employment, for example if its in a different geographic region. It is recommended you speak with an attorney who is experienced in negotiating restrictive covenants and severance agreements.
8. What happens if I violate my non-compete agreement?
If you violate a non-compete or other restrictive covenant agreement, you risk being sued for damages and a court injunction. It is important to speak with an attorney before deciding to violate a non-compete agreement in Florida.
Violating a non-compete agreement in Florida may expose you to paying substantial damages to your former employer, even their legal fees. If you violate your non-compete by working for a competitor, then your former employer may sue your new employer as well for tortious interference with the agreement. Generally, it is wise to ensure your potential new employer is aware of your agreement before accepting employment.
9. Are non-compete agreements enforceable against independent contractors in Florida?
Yes. Non-compete agreements and other restrictive covenants are enforceable against independent contractors and business sellers in Florida, provided the statutory criteria is met. If you are classified as an independent contractor, you should also consult with an attorney to determine if the classification is proper. If you were misclassified, that may serve as a defense to enforcement of a non-compete agreement and you may be entitled to additional compensation.
10. What should I ask for when my employer asks me to sign a non-compete?
You should ask for time to review the agreement and you should hire an attorney to discuss the agreement with you. Most non-compete agreements in Florida run from six months to two years. You should try to keep the restriction as short as possible. You should also request that the non-compete agreement only cover the geographic area where you actually work, not every office the company may have. You are giving up an important right – the right to work wherever you want.
11. What should I do if my employer does not let me have an attorney review a non-compete agreement?
While Florida law doesn’t necessarily protect your right to have an attorney review a proposed non-compete agreement, you should insist that you have time to consider and review a non-compete agreement with an attorney. Your employer is asking you to give up an important rights – for example, the rights to work for a competitor or start your own business.
12. Can I be fired in Florida for refusing to sign a non-compete agreement?
Yes. In Florida, employment is “at-will.” That means you can be fired for any lawful reason. It is not unlawful to terminate an employee who refuses to sign a non-compete, unless the termination somehow related to protected category, such as race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history), and retaliation/whistleblower.
13. Can an employer require a non-compete agreement as part of a severance package in Floida?
Yes. Employers in Florida are generally not required to provide a severance package, so they can insist on including a non-compete provision in a severance agreement. The departing employee will need to weigh the value of severance benefit compared to being able to seek employment with a competitor without a non-compete.
In certain limited circumstances involving ERISA-governed benefit plans, employees may be entitled to severance if their plan requires it. Under this rare circumstance, Employers may not add additional conditions to the severance agreement.
14. A former employee is violating a non-compete agreement. What can I do?
Guidance on what to do when a former employee, contractor, or business seller is violating a non-compete in Florida is provided in this previous article: Non-Compete Disputes: Enforcing Non-Compete Agreements (cantrellzwetsch.com). In sum, speak with a Florida non-compete attorney immediately. An attorney who specializes in non-compete disputes can quickly assess whether the non-compete agreement is enforceable, the costs of enforcement, and the potential defenses or counterclaims the former employee or contractor might assert, and the pros and cons of litigation.
There are times where a simple cease-and-desist letter can gain compliance. There are other times where it is necessary to file a lawsuit to force the employee to abide by their agreement. Time is of the essence when you discover that a former employee or contractor is violating their non-compete agreement. If you wait too long, a court may not issue an injunction forcing the person to stop violating their agreement. Contact us. We can help you evaluate what strategy to pursue.