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Florida Non-Compete Agreements

The business law attorneys at Hackworth Law, P.A. often work with both employers and employees to navigate non-compete agreements in employment contracts. Buyers of a new business may also require the seller(s) to entire into non-compete compete agreements to increase the likelihood that business clients remain with the buyers. Non-compete contracts are enforceable under Florida law so long as the agreement is reasonable in scope (geography and trade activities) and duration. Section 542.33(2)(a), Florida Statutes (2013), states, in pertinent part:

One who sells the goodwill of a business, or any shareholder of a corporation selling or otherwise disposing of all of her or his shares in said corporation, may agree with the buyer, and one who is employed as an agent, independent contractor, or employee may agree with her or his employer, to refrain 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 buyer or any person deriving title to the goodwill from her or him, and so long as such employer, continues to carry on a like business therein.

The reasonableness of scope and duration in a non-compete agreement are varied and largely industry-dependent.

A non-compete agreement need not be a separate agreement and may be contained as a mere clause in an employment contract, buy-sell agreement or business purchase contract. As non-compete agreements are enforceable, the primary mechanism to force compliance with an agreement’s terms is through a civil injunction prohibiting further activities that could amount to competition. A person who breaches a non-compete agreement can be liable for significant monetary damages and may be prohibited from engaging in their livelihood for the time the non-compete agreement is in effect. Moreover, poorly-drafted and unenforceable non-compete agreements may open a business to unanticipated competition.

Regardless if you are a business, buyer/seller, employee or independent contractor, the attorneys of Hackworth Law, P.A. recommend that you carefully review the terms of any agreement that could be considered a restraint on trade and consult a qualified business and employment law attorney to properly advise you on the enforceability of such an agreement and what it could mean for you.