Non-Compete Agreements and Independent Contractors

According to FL Statute 542.335(1)(d)(1), non-compete agreements are enforceable against an independent contractor just like an employee. However, the agreement signed may not be legally enforceable for other reasons. Non compete agreements must serve to protect an employer’s “legitimate business interest.”Florida law sets out a non-exclusive list which includes: trade secrets, confidential business or professional information that does not qualify as a trade secret, substantial relationship with specific customers, patients or clients, or customer goodwill associated with an ongoing business, a specific geographical location or marketing area, or extraordinary or specialized training.

  • The main question to ask is whether it would be unfair for the employee to use that to benefit his/her new employer.

There are many Florida cases interpreting these various business interests, and what may or may not qualify. For example, courts have stated that the specialized or extraordinary training must be very specific. In other words, just because an employee receives some on-the-job training, such as how a particular company does things, does not necessarily mean that this training would qualify as extraordinary. Say the employee receives just basic training on a computer system, such as word processing or spreadsheets, it is unlikely that the training would qualify for specialized training.

The burden is on the employer to plead and prove the existence of these legitimate business interests, and also prove that the restriction sought to be enforced is reasonably necessary to protect those interests.

Non-compete agreements must also be reasonable in time and geographic scope. Florida Statute 542.335(1)(d) provides that a court will presume 6 months or less as reasonable, and more than two years as unreasonable. As for the geographic scope, “reasonable” means the areas in which the employer does most of its business.

In Florida, if a non-compete is unreasonable, the agreement will still be enforceable, but the court might cut back the time or area to which it applies.

Employee’s Defenses:

An employee facing a lawsuit on a non-compete may defend by challenging the existence of the business interests claimed by the employer or the reasonableness of the restrictions. Other defenses are available to the employee as well.

A common defense by an employee is a claim of prior breach. That is, that the employer first breached some aspect of the employment agreement, thereby rendering the non-compete provision unenforceable.

  • The employer’s failure to pay compensation under a contract of employment is the most common material breach available as a defense to employees who have previously signed a non compete agreement. Florida courts have regularly denied injunctive relief in these situations.
  • Benemerito & Flores, M.D.s, P.A. v. Roche, 751 So. 2d 91 (4th DCA 1999)
  • Harrison v. Palm Harbor MRI, Inc., 703 So. 2d 1117 (Fla. 2d DCA 1997)

Do you have a non-compete in place with your employees or independent contractors and may need an updated review? Call us at (786) 837-6787 or email us info@epgdlaw.com with your questions. Our team is ready to answer any questions you may have.

*Disclaimer: This blog post is not intended to be legal advise. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*