When Are Non-Compete Agreements Enforceable And What Are The Defenses Against Them?

Non-compete agreements are enforceable in Florida. This is because under Florida law continued employment is valid consideration for a non-compete provision. Florida statutes also presume that non-compete agreements are valid. Even if an employer fires an employee, the non-compete agreement may still be enforceable. However, there are ways an employee can defeat a non-compete agreement. The following are examples of defenses that may be raised in order to defeat a non-compete agreement.

1. The employer is no longer in the line of business:

If the employer seeking enforcement no longer continues business in the area or line of business that the agreement seeks to stop the former employee from working in, then the agreement may not be enforceable. However, this is true only if such discontinuance of business is not the result of a violation of the restriction.

2. There is no legitimate interest to enforce:

For the non-compete provision to be valid, an employer must have a legitimate interest to enforce. The following are some examples of legitimate business interests:

• Trade secrets;
• Valuable confidential business or professional information;
• Substantial relationships with specific prospective or existing customers, patients, or clients;
• Goodwill associated with an ongoing business or professional practice, by way of a trademark, geographic location or marketing/trade area; and,
• Extraordinary or specialized training.
• If a business does not have a legitimate business interest to enforce, then the non-compete agreement may not be enforceable.

3. The agreement is unreasonable in time or geographic area:

For the agreement to be enforceable it must be reasonable in time, geographic area and in line of business. For instance, if a pest control company only operates within a small area of one county, it would be unreasonable for company to seek enforcement of a non-compete agreement in another county where it does not operate. As to the period of time a former employees non-compete agreement is enforceable, a period of less than 6 months is presumed valid and a period over 2 years is presumed invalid. Some judges will find such agreements under 3 years reasonable because there is a related statute finding 3 years reasonable when there is a former business owner selling a business. But anything over 2 years is going to be a hurdle for the employer to overcome. It should be noted that Courts have the power to modify, or red line, an agreements provisions to make them reasonable.

4. The employer breaches the employees contract:

Many non-compete provisions are part of an employment contract that also outlines employer and employee duties, compensation for the employee, insurance benefits, and other conditions of employment. If the employer breaches the agreement by failing to pay all compensation due or failing to fulfill other material requirements, such as providing insurance benefits, the employee may be relieved of all obligations under the contract.

5. The alleged confidential information is readily available to the public:

Employers frequently base their non-compete agreements on trade secrets. However if the information that the employer seeks to protect is readily known in the industry then the agreement is not enforceable. For example, existing customer lists are protected. However, information contained in industry newsletters, journals or chamber of commerce directories are not.

6. Public health or safety would not be served:

This primarily applies to scientific and health areas. If enforcing the agreement would cause a shortage of qualified personnel in a particular geographic area, then the agreement would be unenforceable. For instance, if the employee is one of ten heart surgeons in a particular geographic area who can perform open heart surgery, then a non compete agreement preventing the surgeon from working in that area may endanger lives and would probably be unenforceable.

If a non-compete agreement is found to be unenforceable, then an employer, who interferes with a former employees relationship with his new employer, may in some instances be liable for tortuous interference. If you need advice regarding a non-compete agreement, you should seek the advice of a qualified attorney.