Ins and Outs of Non-Compete Agreements
ADAM G. RABINOWITZ, ESQUIRE
Moore Rabinowitz Law
1776 North Pine Island Road, Suite 102
Plantation, FL 33322
When non-compete and non-solicitation agreements are mentioned by employers or employees, a few important questions come to one’s mind, such as:
- The terms of the restrictive covenant are very broad – Is it enforceable?
- Can the Court stop me from making a living?
- Florida is a work at-will state – Are non-compete agreements even enforceable?
The short answer to these questions is that restrictive covenants are presumptively enforceable if certain elements are present. The basic elements are set forth in Chapter 542, Florida Statutes.
To establish the predicate for an enforceable non-compete agreement, it must be supported by “legitimate business interests.” Florida Statute § 542.335 confirms that Courts will enforce a written restrictive covenant to protect things such as a Company’s: (1) trade secrets; (2) confidential information; (3) substantial relationships; (4) customer, patient, or client goodwill; and/or (5) specialized/extraordinary training of an individual.
These basic elements are subject to the scope of the restriction(s), geographic parameters, and a temporal element. However, a common misperception is that simply because one of these elements is overly broad, a person/party can escape the restriction in toto. This is where agreements with restrictive covenants are unique because they are an exception to the general rule that a Court is precluded from re-writing an agreement to make it more fair. Namely, if a non-compete is overly broad relative to scope, geographic area, or time, the Court may “blue pencil” the agreement by entering injunctive relief different from the parties’ agreement yet still enforce the spirit of the agreement consistent with the legitimate business interest of the company.
This does not mean a restrictive covenant will always survive scrutiny and be upheld. There are a variety of defenses to enforcement of such agreements due to common errors in drafting, mistakes made by employers when someone quits, and general public policy matters precluding enforcement as well.