Were you recently fired because of the pandemic and wondering if the non-compete you signed is still enforceable? Don’t assume that just because you got terminated that you are free to ignore those obligations. You should know that Florida actually has a statute that says courts must enforce non-competes within certain guidelines. And, to make it more confusing, when it comes to non-competes, there are no black and white answers–every case will be different.
In Florida, a non-compete (or non-solicitation) agreement will be enforceable if the following factors are met:
- Written Signed Agreement. Your employer must have a written non-compete that is signed by you to enforce it. If you do not have a copy of it, ask for it.
- Legitimate Business Interest. To support the need for the non-compete, your employer must be able to show it has a “legitimate business interest” to justify keeping you from a new job. Legitimate business interests include:
- Trade secrets, such as a customer list
- Valuable confidential or professional information
- Substantial relationships with specific existing or prospective customers/clients
- Customer/client goodwill
- Extraordinary or specialized training.
This is not a complete list. Basically, if hiring you would give a competitor an unfair competitive advantage over your last employer, a court will likely enforce the non-compete.
3. Reasonable Geographic Restrictions and Time Period. Your employer can only enforce the non-compete if it is reasonable in how long and far it reaches.
- Length of the Restriction. According to Florida law, a non-compete shorter than six (6) months is generally reasonable and anything longer than two (2) years is unreasonable. If your non-compete is somewhere in the middle, then it will depend on your particular situation.
- Geographic Restriction. Courts look to whether the geographic restriction is reasonably necessary to protect the employer’s legitimate business interest. Are you restricted from competing in just your assigned territory? The entire state? The nation? The world? Don’t assume that a nationwide restriction will be unenforceable. It depends!
Florida is a “blue pencil” state. This is important, because it means the court will take a pencil and change the agreement to be reasonable, rather than just throw it out completely.
If your non-compete complies with the law, then you may not be able to get out of it. In fact, Florida law prohibits judges from sympathizing with your specific economic situations or other hardships that may be caused by the restrictions. But some defenses include:
- The employer is no longer in the line of business covered by your non-compete or new job.
- The employer breached its contractual obligations to you.
- The employer has “unclean hands” (did something dirty!) to you, such as unlawful discrimination or retaliation.
Defenses are not clear-cut either, and every case will be different.
Maybe since the President declared that a major disaster exists in Florida, courts may find that enforcing a non-compete during the pandemic is detrimental to the public health safety and welfare given the current downturn in our economy. Maybe if the courts determine that enforcing non-competes will only add to the economic depression in Florida, improving the economy may outweigh protecting an employer’s legitimate business interest. However, it remains to be seen.