Florida Law on "Covenants Not to Compete"
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What Is a Covenant Not to Compete?
A covenant not to compete is language contained in an employment contract that disallows an employee to quit and take up work in a similar company in the same area for a certain period of time.
Are Covenants Not to Compete Valid in Florida?
Unlike most other states, Florida has statutes governing all aspects of covenant not to compete law. Florida statutes are relatively liberal in upholding covenants not to compete. In contrast, United States law generally disfavors restraints on trade and freedom, and California statutes specifically forbid covenants not to compete.
In order for a covenant not to compete to be valid in Florida, the following requirements must be met:
- Geographical limitation: the covenant must be reasonable in terms of distance from the original employer. The rule provides that the area must be where the employer conducts business. For a nationwide employer, a nationwide covenant not to compete may be upheld.
- Time period: the covenant must not prohibit an employee from similar work for an unreasonable time. Florida statutes hold restraints of less than 6 months to be reasonable, while more than 2 years as unreasonable. The judge has discretion to determine the reasonableness of time periods in between 6 months and 2 years.
- Area of work: the field or area of work must be defined in a reasonably narrow way. For example, a network designer of a certain network type should not be prohibited from working in the IT industry as a whole. A Florida covenant not to compete must also protect certain "legitimate business interests." These include relationships with customers, confidential information, and trade secrets.
The Discretion of the Judge
The major difference in Florida’s non-competition laws is that a judge is required to "blue-line" or cross out certain provisions of an overly broad covenant not to compete to protect the employer's interests. Also, unlike other states, Florida employers are entitled not only to an injunction prohibiting the former employee from working for a competitor, they are also entitled to monetary damages and attorney’s fees. Therefore, employees should use some caution before signing a covenant not to compete in Florida.
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Last Modified: 03-07-2014 10:41 AM PST
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