Florida Law on Enforcing Restrictive Covenants
Florida employers often request employees to execute a non-compete agreement or other types of restrictive covenants as a condition of employment. Typically, a company doesn’t want an employee to take advantage of the training, contacts and support the employer provides to the employee, so that the employee can then take that knowledge and information to a competing business. In general, state law prohibits employers from enforcing agreements considered to be in restraint of trade. However, certain agreements are enforceable if they comply with statutory requirements. Before you attempt to impose a restrictive covenant on employees, talk with a Florida employment contracts lawyer about the requirements that will ensure enforceability.
Enforcement of a restrictive covenant, including a non-compete agreement, is only possible if it’s contained within a written document that’s signed by the employee.
Reasonable in Scope
The restrictions for post-employment competitive activities must be reasonable in terms of time, geographic area, and line of business. Florida law deems a six month restriction as reasonable and a restriction over two years as unreasonable. The time period over six months to two years must be reasonable to be enforced. Similarly, the geographical limitation must be reasonable. Reasonableness is a broad term to be considered on a case-by-case basis.
Legitimate Business Interests
Florida law requires that a restrictive covenant must be supported by a legitimate business interests, rather than some other motivation. The interests might include trade secrets, business or professional details, specialized training, reputation and goodwill, and other factors.
Issues involving legitimate business interests in non-compete agreements often arise in the context of contact information of the employer’s clients. During his or her employment, the worker has access to these details and may have developed relationships with some of these customers. Many times, so long as the other requirements of a restrictive covenant are met, courts will find that the contact information is a legitimate business interest of an employer.
Necessary for Protection
The non-compete clause or other restraint on trade must be necessary to protect the legitimate business interests described. This factor ties into the specifics of the clause and whether the restriction is reasonable under the circumstances. For example, if the language prevents the former employee from competing by working for a designated list of employers, it may be considered reasonable. However, a clause that prevents him or her from working for any company that’s not directly related to the specific line of business will likely be enforceable.
It’s understandable that as an employer you would want to protect your investment by restricting employees from working for your competitors and using your valuable information. Consequently, it is important to be aware of the statutory requirements that you must adhere to when crafting restrictive covenants in employee agreements. It’s best to consult with an employment lawyer to ensure there are no holes in the agreement that make it unenforceable. Penichet Law has assisted clients in drafting enforceable restrictive covenants, and in pursuing employees that breach them. Please contact our Miami office for more information or questions regarding restrictive covenants in Florida.