What do you do if you signed a non-compete agreement with your employer in Florida and now want to go to work for a competitor of your employer? Many people believe that if an employer forces an employee to sign a non-compete agreement as a condition of employment, the agreement is unenforceable. That is not true in Florida because such agreements are presumed by law to be valid. However, that does not mean you have no ability to defeat the agreement in the event your former employer tries to enforce it. There are several potential arguments one may be able to make.
Material Breach by Employer
One argument is that the employer somehow materially breached the employment contract. For example, if the employer did not fulfill its obligations to the employee with regard to such items as compensation, insurance, etc., then the employee could argue that the non-compete provisions should not be enforced.
Another argument related to the employer’s material breach is that the work arrangement violates federal law, such as the Fair Labor Standards Act (FLS). If the compensation for the position does not comply with the FLS, then the employer may have materially breached the contract. Obviously, it is easier to prove a material breach if there is an employment contract as opposed to a standalone non-compete agreement.
Legitimate Business Interests
This is the area where non-compete agreements are most likely to be defeated. You could argue that the restrictions in the non-compete agreement are overly broad and go beyond legitimate business interests of the employer. Florida statutes provide that legitimate business interests include:
- Trade secrets
- Valuable confidential information
- Substantial relationships with existing or future customers or clients
- Business goodwill or reputation by way of a trademark, physical location or marketing region
- Extraordinary or specialized training
The employer bears the burden to show that the non-compete agreement is reasonably necessary to protect those business interests. The burden then shifts to the employee to provide evidence showing the employer’s business interests do not need protection or the restrictions are overly broad.
For example, you could argue that you did not have access to trade secrets, other types of confidential information or customer lists or that such information is readily available to anyone in the industry. You could also assert that you wouldn’t be in a position to harm the employer’s goodwill if you were to use it while working for the competitor. Additionally, you could negate the “extraordinary or specialized training” business interest by proving that you had those skills before you started working for the employer. Finally, the court could question whether legitimate business interests are even at stake if the employer makes everyone from the office clerk to the CEO sign a non-compete agreement.
If the time period of the non-compete agreement is too long, it may not be enforceable. Agreements of six months or less are presumed to be valid while agreements of more than two years are presumed to be invalid. However, with sufficient evidence, the court may find that an agreement of more than two years reasonable. Employers have the burden of proving that the duration of the agreement is reasonable.
The same is true for the geographic restriction. A former salesperson could argue, for instance, that their territory was limited to Tampa, so now they should not be prevented from working in another territory across the Bay in Clearwater.
Because a non-compete agreement can seriously restrict your livelihood, you should have an experienced lawyer review the agreement before signing it. Remember that the court will not consider the economic hardship that you will face if the non-compete agreement is enforced. Mere assertions that the agreement is somehow unfair will similarly not defeat the non-compete agreement. You must present concrete legal evidence showing why the non-compete agreement is unenforceable. If you have already signed a non-compete agreement and would like to change jobs, you should talk to an employment lawyer to plan a course of action before leaving.