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Florida Court Once Again Confirms the Validity and Enforceability of Non-Compete Agreements

In our practice we often hear individuals state that non-competition agreements are unenforceable in Florida because Florida is a “right to work” state. This concept is often misunderstood to mean that employees have a “right to work” without restriction. At its most basic level, the concept of “right to work” really means that employers have the right to terminate employees with or without cause. This, however has nothing to do with the enforceability of non-competition agreements in Florida.

If there continued to be any doubt that non-competition agreements were enforceable in Florida, this doubt was again recently erased when the Florida Third District Court of Appeal yet again confirmed the legitimacy and enforceability of a non-compete agreement.

The enforceability of non-competition agreements is often dependent on whether and to what extent an employer seeks to protect its legitimate business interests. In other words, if the employer has no legitimate business interest and merely seeks to stop an employee from working, courts are reluctant to enforce such agreements.

Pursuant to Florida Statute § 542.335, courts are required to construe restrictive covenants in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement. Specifically, the term legitimate business interest includes:

  1. trade secrets;
  1. valuable confidential business or professional information that otherwise does not qualify as trade secrets;
  1. substantial relationships with specific prospective or existing customers, patients, or clients;
  1. customer, patient or client goodwill associated with: (a) ongoing business or professional practice, by way of trade name, trademark, service mark, or trade dress; (b) a specific geographic location; or (c) a specific marketing or trade area; and
  1. extraordinary or specialized training.

In this recent case decided by the Third District Court of Appeal, the employer presented evidence demonstrating that if the temporary injunction was denied, it would suffer irreparable harm. Specifically, the employer offered testimony that its business would be severely hurt if the employee were given the opportunity to use the employer’s customer information, relationships and marketing strategy in his new employment.

Once the employer presented evidence of irreparable injury which was presumed under the applicable statute, the burden shifted to the employee to establish the absence of injury. The employee failed to present such evidence. The employee merely argued that he had not yet begun to actively work for his new employer, and accordingly, had not yet breached the non-compete and no monetary damages had occurred. Florida’s Third District Court of Appeal held that employer seeking an injunction need not directly prove that the former employee’s actions will necessarily cause irreparable harm if not enjoyed where the presumption of harm is unrebutted.

Whether you are an employer or employee involved in a non-competition dispute, the attorneys at Rosenthal Law Group are available to offer guidance and representation to assist you in your matter.

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