What to Know About Noncompete Agreements in Florida

Many companies use legal documents to protect themselves from the actions of employees. One such document is a noncompete agreement.

Non-compete agreements serve as legal mechanisms to protect legitimate business interests, allowing businesses to secure their trade secrets and maintain strong relationships with specific customers. However, their enforceability must comply with both Florida law and recent federal regulations.

Under Florida Statute 542.335, non-compete agreements are enforceable as long as they are reasonable in terms of duration, geographic scope, and business activities. Florida courts aim to strike a balance between protecting trade secrets and preserving an individual’s right to pursue their chosen profession. Employers are required to demonstrate a legitimate business interest, such as safeguarding confidential information or maintaining an established customer base.

In April 2024, the Federal Trade Commission (FTC) issued a rule that substantially restricts the use of non-compete clauses nationwide. This rule broadly prohibits non-compete agreements for all employees, with exceptions only for certain senior executives and in circumstances involving the sale of a business. The rule has significant implications for Florida businesses, which now must adhere to both state-specific regulations and the new federal standards.

Here are key points about non-competes in Florida:

1. Legitimate business interest. For a non-compete to be enforceable, it must protect a legitimate business interest, such as trade secrets, confidential information, or substantial relationships with customers or clients.
2. Reasonableness. The non-compete must be reasonable in terms of duration, geographic area, and scope of prohibited activities. For example, a non-compete that restricts a former employee for an excessively long period or over a broad geographic area may not be enforceable.
3. Presumptions of reasonableness. Florida law provides presumptions for what is considered reasonable in terms of time. For example, a non-compete lasting six months to two years is typically considered reasonable for employees, while anything over two years might require additional justification.
4. Court’s role. Florida courts have a history of closely examining non-compete agreements to ensure they are necessary to protect the employer’s interests without restricting the employee’s ability to work. If a court finds a non-compete agreement unreasonable in any respect, it has the authority to modify the agreement to make it reasonable and enforceable.
5. Consideration. Non-competes must be supported by adequate consideration, meaning that the employee must receive something of value in exchange for agreeing to the non-compete.

In Florida, non-compete agreements can also apply to independent contractors, not just employees. The enforceability of these agreements follows the same principles, focusing on the protection of legitimate business interests and reasonable limitations on time and geography.

Learn More About Noncompete Agreements

Many businesses use noncompete agreements to protect their interests. However, employers need to be mindful of the requirements. They cannot be overly restrictive.

Whether you are an employee or employer, Orlando noncompete agreement lawyer B.F. Godfrey from Godfrey Legal can assess your noncompete and address your concerns. We’ll protect your legal rights and help you avoid mistakes. To schedule a consultation, call (407) 890-0023 or fill out the online form.

Source:

leg.state.fl.us/Statutes/index.cfm/Ch0092/index.cfm?App_mode=Display_Statute&Search_String=&URL=0500-0599/0542/Sections/0542.335.html