Law and Arbitration Offices of Donald T Ryce

           Under Florida law, restrictive covenants such as non-compete or no-solicitation agreements[1] are permitted but are subject to certain statutory requirements located in section 542.335, Florida Statutes.  Among these requirements are that the restrictive covenant must be in writing and signed by the person against whom enforcement is sought[2], and that the person seeking enforcement must prove that the restraint is reasonably necessary to protect the legitimate business interests justifying the restriction.  There are five specific business interests listed in the statute: trade secrets; valuable confidential business or professional information; substantial relationships with specific perspective or existing customers; customer goodwill associated with an ongoing business, a specific geographic location, or specific marketing or trade area; and extraordinary or specialized training.  The statute provides that this list is not intended to be all-inclusive.        

           Usually, the battle over enforcement of a restrictive covenant in Florida begins with an effort by the enforcer to obtain a temporary injunction.  This is typically where the defendant puts its main effort to win; otherwise, the plaintiff is in a superior position for litigation or settlement purposes.  Regarding potential defenses, in addition to challenging problematic language in the restrictive covenant itself, defendants are sometimes able to raise a general defense to enforcement of the restrictive covenant.  The most common general defense is that the plaintiff employer itself has materially breached the contract between the parties, often because it has failed to pay the monies owed under the contract or has unilaterally changed the contract's terms to the detriment of the other party.  Benemerito & Flores, M.D.s, P.A.v. Roche, 751 So. 2d 91 (4th DCA 1999); Troup v. Heacock, 367 So. 2d 691 (Fla. 1st DCA 1979).  The "material breach" defense, if available, is a potent one that can win the entire case.

              Other defenses are contained in the statute.  For example, a restrictive covenant of more than two years duration, not involving trade secrets, is presumed unreasonable.  In such cases, the employee can argue that the prohibition is unreasonable and should be reduced to two years or less.[3]

                As has been noted, there are some general defenses that can be raised in any enforcement action which, if successful, can defeat a plaintiff's claim completely.  For one thing, the defendant can argue that the plaintiff has failed to prove the existence of a "legitimate business interest"; absence such proof, the restrictive covenant is unenforceable.  Section 542.335(1)(b) (“Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.”).  Often the plaintiff contends that the legitimate business interest is a trade secret, which the plaintiff must specifically plead and prove.  Lovell Farms, Inc. v. Levy, 641 So.2d 103 (Fla. 3^rd DCA 1994). 

                 A typical alleged trade secret upon which plaintiffs rely is the existence of a customer list.  See e.g. Fulford v. Drawdy Bros. Constr., II, Inc., 903 So.2d 1007, 1007 (Fla. 4th DCA 2005).   However, customer lists probably will not qualify as trade secrets unless the plaintiff can prove that they are the product of great expense or effort or that they include information not available from public sources. Cf.  Autonation, Inc. v. O'Brien, 347 F.Supp.2d 1299, 1304 (S.D.Fla.2004).