Florida Non-Compete Agreements, also known as Covenants not to Compete (Part 1 of 4): Florida's Past Approach
Each state has its own set of standards when determining the reasonableness of the restrictions set forth in a Covenant Not to Compete (“CNC”). Over the years, Florida’s laws governing CNC’s have changed, allowing employees more relief from restrictive terms found in most CNC’s.
Prior to June of 1990, Florida’s Anti-Trust Act limited the court’s discretion in how it determined the validity of CNC restrictions imposed on certain trades as defined by F.S.§ 542.33. In part, the statute allowed employers to bind employees, agents and independent contractors from carrying on or engaging in a similar business and from soliciting old customers of such employer within a reasonably limited time and area, so long as the employer remained in the same type of business. When faced with a breach, the damaged party sought equitable relief, typically in the form of an injunction.
At the time (pre - 1990), the Florida Supreme Court had ruled that when an employer could prove a breach of a valid CNC, irreparable damages were presumed, and a court was forced to enjoin the breaching party. When evaluating the terms of a CNC, a court could only consider the extent to which the agreement was reasonable in length of time and area covered. Therefore, the courts could only evaluate and modify the time and area restrictions, if found to be unreasonable.
Due to inconsistent court rulings and the use of overbroad terms in CNC’s, Florida has amended its statutes on several occasions and the courts have changed that position - more on how Florida's courts currently interpret the law in part 2. If you have a question about Employment Law and Non-Compete Agreements, visit our website Wood, Atter & Wolf. or call (904) 355-8888 to speak with one of our attorneys.
