Avoiding the “Cross Road Blues”: An Overview of Non-Compete Agreements in Florida
There is a well-known Faustian legend about the great Delta blues musician Robert Johnson that maintains he went out to a crossroad down in Mississippi and agreed to sell his soul to the Devil in exchange for becoming the greatest Blues musician who ever lived. This story has grown through the decades, and it certainly does not help that Mr. Johnson passed away under mysterious (or at least mysterious to the historical record) circumstances at the age of 27. Robert Johnson left behind a comparatively small body of work, but his legacy on music is undeniable. One of the great tracks he left behind is “Cross Road Blues.” In the song, the narrator discusses the difficulties he is facing and how he searched for guidance while at the crossroad. Like the narrator, we often receive calls from employees and employers at the crossroad of an employment relationship. One question asked of us on an almost daily basis is whether non-compete agreements are enforceable in Florida. In this post, we will answer that question and provide some guidance regarding such agreements.
The short answer is that non-compete agreements are generally valid in Florida, if they meet certain requirements. Section 542.335, Florida Statutes, governs non-compete agreements in Florida. Such agreements are valid “so long as such contracts are reasonable in time, area, and line of business[.]” § 542.335(1), Fla. Stat. (2021). Non-compete agreements must be in writing, and the party seeking to enforce it must also “plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant.” § 542.335(1)(a)-(b), Fla. Stat. (2021). The party seeking to enforce the non-compete agreement must “plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant.” § 542.335(1)(b), Fla. Stat. (2021). The Legislature provided the following examples of a “legitimate business interest,” although this is by no means a complete list:
- Trade secrets (as defined in section 688.002(4), Florida Statutes);
- Valuable confidential business or professional information that otherwise does not qualify as trade secrets;
- Substantial relationships with specific prospective or existing customers, patients, or clients;
- Customer, patient, or client goodwill associated with:
- An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”;
- A specific geographic location;
- A specific marketing or trade area.
- Extraordinary or specialized training.
§ 542.335(1)(b)1.-5., Fla. Stat. (2021). The party seeking to enforce the non-compete must also plead and prove that “the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction.” § 542.335(1)(c), Fla. Stat. (2021). Generally, the courts will deem reasonable a non-compete for two (2) years or less and will examine the geographic scope of the non-compete on a case-by-case basis. It is important to note that non-compete agreements vary and that it is critical that they be evaluated on an individual basis by an attorney.
One recent development of note is President Biden’s issuance of an Executive Order that in part targets non-compete agreements. Specifically, President Biden instructed the Chair of the Federal Trade Commission (“FTC”) as follows: “To address agreements that may unduly limit workers’ ability to change jobs, the Chair of the FTC is encouraged to consider working with the rest of the Commission to exercise the FTC’s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” Proclamation 14036, 86 FR 36987 (July 14, 2021). To date, there has been no implementation of this Executive Order. Even if the FTC attempts to enforce the limits on non-competes, there will certainly be legal challenges. We will provide updates on this issue as they become available.
If you need further assistance navigating the crossroad of an employment relationship (or ensuring you are prepared if you ever come upon it), please do not hesitate to contact us. We are here to make sure that employees and employers can have a smooth transition and do not feel as lost as Robert Johnson’s narrator.
We hope you and your family stay safe and healthy.