Call Us Now
Email Us Now
In the fast-paced business world of Central Florida, from the tech companies in Lake Nona to the tourism giants in International Drive, it is common for employers to ask employees to sign non-compete agreements. These contracts are put in place to protect a company’s business interests by restricting a former employee from working for a competitor for a specific time and within a specific geographic area.
What happens when an employee leaves and a dispute arises? The central question for both sides is: How do courts in Florida decide whether to enforce a non-compete clause?
The Courts in Orlando and Non-Compete Clauses
We know that non-compete disputes can be a significant source of stress, whether you are a business owner trying to protect your company’s valuable assets or a former employee seeking to continue your career. The law in this area is complex, and we can help you gain an understanding of the factors that Orlando courts consider when evaluating these agreements.
The Starting Point: Is a Non-Compete Valid Under Florida Law?
Florida has a statute, § 542.335, governing the enforceability of restrictive covenants, including non-compete agreements. The law starts with the presumption that these agreements are enforceable, as long as they are reasonable in their terms and protect a “legitimate business interest.”
A non-compete clause is unenforceable unless it appears in a carefully drafted and signed document, a basic requirement. The party seeking to enforce the agreement, typically the employer, must then plead and prove that the restrictions are reasonably necessary to protect one or more legitimate business interests.
What Will the Court Consider in a Non-Compete Agreement?
The core of a non-compete dispute often revolves around whether the terms of the agreement are reasonable. Florida courts evaluate reasonableness based on three main factors: time, geographic area, and scope of activity.
Reasonableness of Time
The duration of the restriction is a key factor. The statute provides specific guidelines for what a court may presume is reasonable. For a former employee or independent contractor, a restraint of six months or less may be presumed reasonable. A restriction that runs for more than two years is presumed unreasonable. These presumptions are not absolute, but are a starting point for the court’s analysis.
Reasonableness of Geographic Area
The geographic scope of the non-compete must be tailored to protect the employer’s specific business interest. A restriction that is too broad will likely not be enforced. For example, a court may not enforce a non-compete that covers the entire state of Florida if the company’s business operations are only in Central Florida and its customers are all within the greater Orlando metropolitan area. The court will look for a connection between the geographic restriction and the business’s protected interests.
Reasonableness of the Scope of Activity
The agreement must not restrict the former employee from engaging in more activity than necessary to protect the legitimate business interest. A non-compete clause cannot be put in place to prevent a former employee from working. It must be specific about the type of work that is prohibited and directly relate that prohibition to a protectable interest.
What Are Considered Legitimate Business Interests By the Court?
A non-compete clause is meaningless without a legitimate business interest to protect. Florida Statute § 542.335 provides a non-exhaustive list of what a court may consider a legitimate business interest. The most common examples include:
Trade Secrets
This includes proprietary information, formulas, or methods that give a business a competitive advantage.
Confidential Information
This refers to valuable business information that does not necessarily rise to the level of a trade secret, such as customer lists or marketing strategies.
Substantial Relationships with Customers
This is a crucial element for many businesses. If an employee developed relationships with clients on behalf of the company, the company has a legitimate interest in preventing that employee from taking those customers to a competitor.
Customer Goodwill
This relates to the reputation and relationships a business has built.
Extraordinary or Specialized Training
When an employer invests significant time and resources in training an employee, it may have a legitimate business interest in preventing that employee from using that training in a manner that will immediately benefit a competitor.
The party seeking to enforce the non-compete must prove the existence of at least one of these interests. A court will not enforce a non-compete agreement based only on the desire to prevent general competition.
What Is the “Blue Pencil” Rule? How Courts Can Modify a Clause
Unlike some states that would declare an unreasonable non-compete void, Florida courts have the power to “blue pencil” the agreement. When the court finds a provision to be overbroad, overlong, or otherwise not reasonably necessary, it must modify the restraint to make it reasonable and grant only the relief that will protect the legitimate business interest. For example, a court might change a two-year restriction to a one-year limitation, or narrow the geographic area from the whole state to Orange County. This detail makes Florida a more favorable jurisdiction for employers seeking to enforce these agreements.
Non-Compete Lawsuits and Personal Hardship
A common defense for an employee facing a non-compete lawsuit is to argue that enforcement will cause them significant financial or personal hardship. Employees may claim they cannot find work in their field because of the restrictions. Florida’s statute is clear on this point. A court shall not consider any individualized economic or other hardship. The focus remains on the reasonableness of the clause itself and the protection of the business interest.
Seeking Guidance on a Non-Compete Dispute?
Whether you are an employer trying to protect your business or an employee facing a non-compete lawsuit, you need a legal team that understands the nuances of Florida law. The business litigation attorneys at Bloodworth Law, PLLC have experience on both sides of these disputes. Attorney Ronald D. Kwentus notes that seeing a case from both a plaintiff’s and a defendant’s perspective provides valuable insight into what the other side is thinking. This unique perspective can be a significant asset in negotiations or litigation.
We provide professional, responsive legal services and strong representation in the Orlando area and beyond. We can help you navigate the complexities of non-compete agreements and draft non-compete agreements that meet the legal guidelines. If you are facing a non-compete dispute, please contact us today at 407-449-8958 for a free consultation.
