Generally, an employer may prohibit a former employee from competing within a particular geographic radius. The radius, however, should not be overly broad. For example, if the employer provides a particular product or service that is commonly available, a court would likely find a restriction that covers the entire state in which someone resides unreasonable. If the particular product or service is extremely unique, perhaps a state-wide, even a multi-state regional restriction may be enforced. Most commonly, our firm has encountered non-competition agreements that restrict a former employee from competing within the same county where the former employer is located.
An employer may prohibit competition for a reasonable period of time following termination of employment. Generally, Florida courts presume a restriction of 6 months or less reasonable. Restrictions of more than 2 years are presumed unreasonable. That is not to say that longer restrictive periods are not enforceable. Rather, certain facts, such as uniqueness of the product or service offered and the extent of employee training, impact a court's ultimate decision on whether a particular time period is too lengthy and unreasonable.
While non-competition agreements are generally enforceable in Florida, some professionals are exempt from certain types of restrictions for various public policy reasons. For example, a law firm could not lawfully prohibit a client from continuing to retain a particular attorney, even if that attorney left the law firm and started his/her own practice nearby. Although attorneys, like some other professionals, would be exempt from such a limitation, they may still be restricted from soliciting other clients, patients, or patrons of their former employers.
Considerations in Light of a Valid Non-Competition Agreement
Even in light of a valid non-competition agreement, an employee may be able to negotiate with his or her employer to limit the scope of an existing non-competition agreement. A negotiated compromise often proves less of a financial hardship on an employee who may be having difficulty securing other employment in his or her field, while saving the former employer the costs of pursuing expensive litigation to protect its interests.
Other Useful Information Concerning Non-Competition Agreements
A non-competition agreement is a type of "restrictive covenant" and often referred to as such. The terms "non-compete" or "covenant not to compete" are also commonly used to refer to restrictions on competition following termination of employment. Confidentiality agreements are another type of restrictive covenant that relate to the protection of a company's proprietary and/or confidential information, such as trade secrets, client lists, marketing materials, etc. Trade secrets, in particular, may be reasonably protected for a period of 5 years. A time period of more than 10 years pertaining to trade secrets is presumed unreasonable. Overall, employers and employees should use caution in dealing with non-competition agreements, because court awarded damages may be extensive. Courts are also permitted to award attorneys' fees/costs to a prevailing party, even absent or contrary to a contract provision providing or limiting the same.