Non-Compete Agreements and Restrictive Covenants

Florida is known as the most employer friendly state in the country when it comes to Non-
Compete Agreements. Florida restrictive-covenant statute, Fla. Stat. 542.335, favors an
employer enforcing a non-compete agreement over a former employee. The statute has a
rebuttable presumption that a violation of an enforceable restrictive covenant creates
irreparable injury. This statute makes an employers chances to obtain an injunction on
prohibiting violations of a restrictive covenant very likely.

A trial court is afforded broad discretion when granting, modifying or denying an injunction for
a restrictive covenant. To grant a temporary injunction for a restrictive covenant the moving
party must plead and establish:

1) A likelihood of irreparable harm and the unavailability of an adequate remedy at
law;
2) A substantial likely hood of success on the merits;
3) That the threatened injury to the petitioner outweighs any possible harm to the;
respondent; AND
4) That the granting of a temporary injunction will not disserve the public interest.

Reliance Wholesale, Inc. v. Godfrey, 51 So. 3d 561, 564 (Fla. 3d DCA 2010).

In a recent opinion, Allied Universal Corp. v. Given, by the Third District Court of appeal held
that “[t]he employer seeking an injunction need not directly prove that the former employee’s
actions will cause irreparable harm if not enjoined; the presumption of harm here is
unrebutted.” In the case Defendant, Given, worked for Allied and signed a non-compete
agreement that stated he could not work for a competing company of Allied for 18 months
after termination and within a 150-mile radius of an Allied Operational facility. Given resigned
from Allied and took a job with Univar, a direct competitor of Allied that sells in the same
geographic area as Allied. Allied filed suit and sought a temporary injunction on Given’s
violation of the non-compete agreement. IN an evidentiary hearing for the temporary
injunction, Allied sought a temporary injunction and the trial court denied it on the grounds
Allied failed to show irreparable harm or absence of an adequate remedy at law. But on the
contrary the appellate court held that the burden shifted from Allied to Given to establish the
absence of irreparable injury when at the evidentiary hearing Allied presented evidence of the
existence of a legitimate business interest and evidence that Given had relationships with
prospective and existing Allied costumers. Also, Allied presented evidence of the training Given
received from Allied on its marketing strategies, manufacturing and production, and
confidential pricing strategies. The court stated, “the only focus at the preliminary injunction
stage is to maintain longstanding relationships and preserve the company’s goodwill.”

Fla. Stat. 542.335 (b) provides a list of “legitimate business interest” that is non-exclusive. They
include:

  • Trade secrets, as defined in s. 688.002(4).
  • 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; or
    – A specific marketing or trade area
  • Extraordinary or specialized training.

Florida’s restrictive covenant statute provides employers with the upper hand in litigation.
Restrictive covenants are essential when protecting proprietary information and trade secrets.
Because of this it is important to have a choice of law provision in your restrictive covenant. But
some states, like New York and Illinois, will not enforce Florida choice-of- law clauses because
they are contrary to the state’s public policy. The courts in the states like Illinois and New York
are concerned with “Florida’s nearly-exclusive focus on the employer interests in contrast
with the traditional balancing test that governs enforcement.”

If any of this resonates with you or you have general questions regarding Non-Compete agreements or restrictive covenants, feel free to reach out to us directly at info@epgdlaw.com or call to schedule a consultation (786) 837 – 6787.

*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.*