Florida Noncompete Law: Drafting Noncompete Agreements Under Florida Law | Fox Rothschild LLP

Florida’s Non-Competition, Florida Stat. 542,335, provides numerous safeguards for employers or business buyers looking to protect goodwill, trademarks, and the like. However, it is important not to overdo it when drawing up a non-compete clause. Should a party need to enforce a non-compete clause, it will likely do so by filing an injunction in a state or federal court. A good non-compete clause should balance a worker’s right to income against a company’s right to protect its customer relationships, proprietary information, and so on. This post addresses a few points to consider when drafting a non-compete clause under Florida law.

Under Fla. Stat. 542.335 (1) (a), Florida Non-compete obligations are unenforceable unless they are in writing and signed by the person against whom enforcement is sought. By drafting a non-competition clause, one party fulfills the requirement of the written form. It is equally important that the non-compete agreement is signed by the person against whom you can ultimately seek enforcement. This could be an employee, a franchisee, or a person buying a business.

A non-compete clause must identify at least one legitimate business that the enforcing party wants to protect. If the court of a non-compete enforcement action finds that there is no legitimate business interest, the court cannot protect anything and the enforcing party will not prevail. The Florida non-compete clause lists five categories of legitimate business interests. A non-compete clause should make it clear that it aims to protect at least one of these interests. Legitimate business interests include (i) trade secrets; (ii) confidential information; (iii) customer relationships; (iv) customer goodwill; and (v) special training.

The list of legitimate business interests is not exclusive, meaning that in addition to the five above, other legitimate business interests can also be included in the non-competition clause. In addition, the non-compete clause can and should list more than one legitimate business interest to be protected.

In enforcing a non-compete clause, the party requesting enforcement must demonstrate that the non-compete clause is reasonably necessary to protect legitimate business interests. When drafting a contract, it is important not to overdo it. For example, if you want to protect customer relationships for a sales rep who only deals with customers in Florida, listing the geographic region for enforcement to include the continental United States may not be helpful.

Section 542.335 contains several rebuttable presumptions about how long the enforcement period for a non-compete clause should be. Be sure to read the law and consider whether the enforcement period included in your non-compete clause should follow the presumptions provided by the law. For example, in the case of non-compete agreements between the seller and buyer of a company, a court must assume that a duration of 3 years or less is appropriate and a duration of enforcement of 7 years or more is inappropriate. This does not mean that a ten year non-compete clause is completely ineffective. Instead, the enforcing party must break the presumption that a ten year term is inappropriate.

Even if a court finds that a non-compete provision is too long in duration, has too much scope, or is otherwise unenforceable, the court can enforce a less restrictive form of non-compete. This practice is commonly known as ‘blue penciling’, which means that the court can amend or add the terms of the non-compete clause to protect legitimate business interests. Section 542.335 (c) provides in particular: “[i]If any contractually stipulated restraint is too broad, lengthy, or otherwise not required to protect legitimate business interests or interests, a court will change the restraint and only provide the facilities necessary to safeguard those interests or interests. ”This gives the enforcer Party and the courts have enormous flexibility in the enforcement of non-compete obligations in order to adequately protect the business interests of a company.

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