Florida Non-Compete Agreements, Non-Solicitation, Non-Disclosure, and Non-Disparagement Agreements
Non-Compete Agreements are disfavored by the Courts, as against public policy, but are enforced by Courts when they comply with Florida Statute 542.335.
Fla. Stat. 542.18 – General Rule Making Restraints Unlawful- Restraint of trade or commerce.—Every contract, combination, or conspiracy in restraint of trade or commerce in this state is unlawful.
All non-compete agreements must comply with Fla. Stat. 542.335, to be enforceable.
542.335 Valid restraints of trade or commerce.—
Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.
Attacking Non-Compete Agreements? Look at whether –
- Not geographically reasonable
- Not reasonable in duration
- Not supported by Legitimate Business Interest
- Procured by Fraud, Duress, or without Consideration.
- Other Equitable Defenses.
- Injunction – is an extraordinary remedy requires showing that money damages would be inadequate.
- Money damages,
- Suing new employer for interfering with business relationship and to enforce injuction(?!?)
- Judicial modification of a non-complying non-compete agreement to meet requirements of Florid Statute 542.335.
Other Related Types of Agreements Included:Non-Solicitation, Non-Disclosure, and Non-Disparagement Agreement
Non-Solicitation- an Agreement prohibiting former employee’s ability to solicit customers, or other employees away from your business.
Non-Disclosure- an Agreement prohibiting disclosure of trade secrets to competitors or other persons or entities.
Non-disparagement- an Agreement prohibiting employee from making negative statements about your company.
We draft non-compete/non-competition agreements. We draft non-solicitation agreements. We draft non-disparagement agreements. We draft non-disclosure agreements.
Usually all these provisions are included in one comprehensive documents.
An example of the above listed provisions are below. Please know that these are not complete agreements but sample provisions.
SAMPLE – Non-Competition
(a) During the term of the Employee’s employment with COMPANY, Employee shall not engage in any competitive act contrary to COMPANY’s business interests.
Further, unless the obligation is waived or limited by COMPANY in accordance with subsection (b) of this Article, Employee agrees that during his or her employment with COMPANY and for a period of two years following termination of Employee’s employment for any reason, with or without cause, (the “Non-Compete Period”) in the area encompassing all of Broward, Palm-Beach, and Miami-Dade Counties of Florida, Employee will not:
1.Directly or indirectly, alone or as a partner, officer, director, shareholder or employee of any other firm or entity, engage in any commercial activity in competition with any part of COMPANY’s business as conducted as of the date of such termination of Employee’s employment or with any part of COMPANY’s contemplated business at that tim
2. Approach, counsel, solicit or attempt to induce any person employed by COMPANY in Florida (or any of its affiliated or related companies), whether that Employee is a full-time employee, part-time employee or independent contractor, to terminate his or her employment,
3. Provide goods or services to any existing customer or prospective customer of COMPANY in Florida (or any of its affiliated or related companies) through any entity other than COMPANY (or any of its affiliated or related companies). For the purposes of this Section. (1) “Existing Customer” shall mean any entity, whether a COMPANY, Partnership, limited liability company, join venture, association, or other business organization to which COMPANY (or any of its affiliated or related companies) has, within the one (1) year immediately proceeding the termination of Employee’s employment, (a) agreed to provide goods or services or (b) provided goods or services, and (2) “Prospective Customer” shall mean any entity; whether a COMPANY, partnership, limited liability company, joint venture, association, or other business organization to which COMPANY (or any of its affiliated or related companies) has submitted within the one (1) year immediately proceeding the termination of his or her employment documented oral or written proposal to provide goods or services.
For purposes of this subsection (a), “shareholder” shall not include beneficial ownership of less than five percent (5%) of the combined voting power of all issued and outstanding voting securities of a publicly held corporation whose stock is traded on a major stock exchange. Also for purposes of this subsection (a), “COMPANY’s business” shall include business conducted by COMPANY or its affiliates and any partnership or joint venture in which COMPANY or its affiliates is a partner or joint venturer; provided that, “affiliate” as used in this sentence shall not include any corporation in which COMPANY has ownership of less than fifteen percent (15%) of the voting stock.
(b) At its sole option COMPANY may, by written notice to Employee at any time within the Non-Compete Period, waive or limit the time and/or geographic area in which Employee cannot engage in competitive activity.
(c) During the Non-Compete Period, prior to accepting employment with or agreeing to provide consulting or independent contracting services to, any firm or entity which offers competitive products or services, Employee shall give 30 days prior written notice to COMPANY. Such written notice shall describe the firm and the employment, independent contracting, or consulting services to be rendered to the firm or entity, and shall include a copy of the written offer of employment or engagement of consulting or independent contracting services. COMPANY’s failure to respond or object to such notice shall not in any way constitute acquiescence or waiver of COMPANY’s rights under this Agreement.
(d) This Article is meant to comply with Fla. Stat. § 542.335, to the extent any provision in this Article is in violation thereof, this section shall be modified to comply with the requirements and limitations of Fla. Stat.§ 542.335.
Non-Recruitment. During the term of Employee’s employment and for a period of two years following termination of Employee’s employment for any reason, Employee will not directly or indirectly hire any of COMPANY’s employees, or solicit any of COMPANY’s employees for the purpose of hiring them or inducing them to leave their employment or contract with COMPANY, nor will Employee own, manage, operate, join, control, consult with, participate in the ownership, management, operation or control of, be employed by, or be connected in any manner with any person or entity which engages in the conduct proscribed in this Article. This provision shall not preclude Employee from responding to a request (other than by Employee’s employer) for a reference with respect to an individual’s employment qualifications.
Non-Disparagement. Employee will not, during the term or after the termination Employee’s employment with COMPANY, make disparaging statements, in any form, about COMPANY, its officers, directors, agents, employees, products or services which Employee knows, or has reason to believe, are false or misleading.
SAMPLE- Non-Disclosure of Trade Secrets, Confidential Business and Technical Information
Non-Disclosure. Employee shall not, whether while employed by COMPANY or otherwise, disclose or use for the benefit of himself or herself or any other person, corporation, partnership, joint venture, association, or other business organization, any of the trade secrets or confidential business information of COMPANY.
For the purpose of this Agreement, “trade secrets” of COMPANY shall include, but shall not be limited to, any proprietary and technical information of COMPANY in the nature of sales, pricing methods, operating systems, and associated procedures and systems, information, programs, services, systems, inventions, and the like developed or employed by COMPANY.
For the purpose of this Agreement, “confidential business information” of COMPANY shall include any information other than trade secrets that is (1) of any value or significance to COMPANY and (2) not generally known to the competitors of COMPANY nor intended by COMPANY for general dissemination, including but not limited to any and all proprietary and technical information of COMPANY in the nature of business operations, operating systems, and associated procedures and systems, information, accounting and financial data, customers lists and customer information, current or potential suppliers, vendors, design systems, pricing and discounting practices. COMPANY’s market data, sources of supply, special programs relating to sales, project files, prospect reports, service, training, and information about COMPANY itself and its executives, officers, directors, and employees.
Duty to Return Information. All of COMPANY’s forms, equipment, computers, communication devices, customer correspondence, internal memoranda, products and designs, sales brochures, training manuals, project files, pricelists, customer and vendor lists, prospectus reports, customer or vendor information, now in the possession of Employee or acquired by Employee while in the employ of COMPANY shall be returned to COMPANY immediately upon conclusion or termination of employment.