Non-Compete Agreement

Enforcing a Florida Non-Compete Agreement by a Successor or Assignee

by

Pursuant to 542.335(1)(f), Fla. Stat., there is a  requirement for specific language in the non-compete agreement that authorizes enforcement of  that agreement by an assignee or successor , stating,

542.335(1)…

(f) The court shall not refuse enforcement of a restrictive covenant on the ground that the person seeking enforcement is a third-party beneficiary of such contract or is an assignee or successor to a party to such contract, provided:

1. In the case of a third-party beneficiary, the restrictive covenant expressly identified the person as a third-party beneficiary of the contract and expressly stated that the restrictive covenant was intended for the benefit of such person.

2. In the case of an assignee or successor, the restrictive covenant expressly authorized enforcement by a party’s assignee or successor.

 In DePuy Orthopaedics, Inc. v. Waxman, 95 So.3d 928, 936 (Fla. 1st DCA 2012), the Court acknowledged the requirement for non-compete covenants to contain an authorization allowing enforcement by a party’s assignee and successor stating, “[t]he pertinent portion of that statute expressly allows assignment of non-compete covenants executed after July 1, 1996, when the agreements so provide:…” (Emphasis added.) The Court in Waxman found the language of the agreement under review sufficient to permit assignment under §542.335(1)(f), Fla. Stat.,

In Waxman, the Court found that language that included the heading “ASSIGNMENT” that the rights and obligations of Joint Venture “shall inure” to Joint Venture’s assignee, sufficient to satisfy §542.335(1)(f), Fla. Stat. See DePuy Orthopaedics, Inc. v. Waxman, 95 So.3d 928, 937 (Fla. 1st DCA 2012).

“In 1996, the legislature significantly rewrote the statute, adopting a new provision. See Ch. 96-257, §§ 1, 3, Laws of Fla., and § 542.335, Fla. Stat. (2003). At the same time, it repealed the old section 542.33 as to non-competition agreements made after July 1, 1996, but provided that old section 542.33 would continue to govern agreements, like the present one, made before that date. It is important to note that the new statute allows the enforcement of non-competition clauses by successors or assignees where the contract does “expressly authorize[ ] enforcement by a party’s assignee or successor.” § 542.335(f)2, Fla. Stat. (2003). This departs from the original legislation, which limited the enforcement of non-competition agreements to the original employer staying in the same business and area. Under the new provision, non-competition agreements can be enforced by assignees, but only if the agreement expressly so provides. Here, the contract does not so provide. Thus under either statute the non-competition clause in this case is not enforceable by the assignee.” (Emphasis added.) See  Marx v. Clear Channel Broad. Inc., 887 So.2d 405, 408 (Fla. 4th DCA 2004).