Non-compete agreements were a standard provision in most employment contracts before the Federal Trade Commission announced in January 2023 that it was considering a rule that would abolish such contracts across the 50 states. The FTC has not moved further on its proposal, but many states have moved to either abolish such agreements, modify their scope, or re-state their legality.
In 1996, Florida passed a law regulating all noncompete agreements and specifying grounds for the enforcement of these contracts. A review of that statute may assist both employers and employees in making decisions about future employment.
The basics
The statute in question refers to noncompete agreements as restrictive covenants. All such contracts are void and unenforceable unless they meet the following criteria:
- The contract must be in writing.
- The contract must be reasonable in its geographic scope and length of time of enforceability.
- The contract is reasonably related to protect the enforcer’s legitimate business interests.
What is a legitimate business interest?
The statute enumerates several legitimate business interests, but the list is not exclusive. It includes protecting trade secrets and other valuable confidential information, protecting relationships with specific customers, and protecting extraordinary or specialized training provided to the employer against whom enforcement is sought. The statute also states specifically that a restraint may be presumed valid if its duration is less than six months. Any restraint that is intended to last more than two years shall be presumed unreasonable.
The noncompete statute contains several exceptions and qualifications that could affect the outcome in any dispute about enforceability of a noncompete. An experienced business attorney can be a valuable ally in any such conflict.