Criticisms and considerations of Florida noncompete law

Criticisms and considerations of Florida noncompete law

| Sep 1, 2020 | Firm News |

Many employers utilize noncompete agreements to protect their business interests in competitive industries. These can be very effective tools to foster competition in the marketplace, but they must hang in a balance with the right of professionals to work.

States have recently criticized Florida for holding the most strict noncompete laws in the nation, favoring employers’ interests over those of employees to a fault. But, as the Florida Bar explains, there is more balance to state laws than initially meets the eye.

Florida noncompete law

Florida noncompete disputes rely on the interpretation of reasonableness. According to the statute, legally-enforceable contracts are “reasonable in time, area, and line of business,” and they must uphold “legitimate business interests.” The law defines these as items like trade secrets, specialized training, confidential business information and customer goodwill. For example, many valid noncompete agreements prevent ex-employees from taking customers away from the former employer.

While Florida law does outline a few specifics on the enforceability of noncompete agreements and when they go too far, courts decide disputes on an individual basis relying on the particular circumstances. For example, the law specifically names time frames when noncompete agreements are reasonable and when they overextend. But the particulars of each case make all the difference.

Common complaints

Complaints about Florida law arise over two clauses in the statute. The first of these is that in noncompete disputes, courts “shall not consider any individualized economic or other hardship that might be caused to the person against whom enforcement is sought.” In other words, the law suggests that undue hardship to the professional is legally irrelevant.

The second is that courts may not “construe a restrictive covenant narrowly, against the restraint, or against the drafter of the contract.” This suggests that judges should favor employers’ interests if any confusion arises about the terms of a noncompete agreement.

Balancing considerations

These two clauses essentially bias any disputes over noncompete agreements in favor of the employer. However, as the Florida State Bar explains, courts have increasingly found ways to balance these clauses with the constitutional guarantee of the right to work and the premise that noncompete contracts must be reasonable.

Courts will ultimately determine whether a noncompete contract is legally-enforceable by evaluating all relevant facts in each case. While the two clauses in question may appear to limit a fair trial, Florida courts have increasingly been willing to work around them by applying other relevant laws.