People's Law Guide
FLORIDA'S NON-COMPETITION STATUTE AND THE APPLICATION OF TWO STATUTORY "LEGITIMATE BUSINESS INTERESTS"
By Attorney Peter Mavrick
In Florida, non-compete covenants are prohibited unless they comply with the requirements of the non-compete statute. Florida Statutes § 542.18 ("[e]very contract … in restraint of trade or commerce in this state is unlawful"); § 542.335 (authorizing anti-competitive contracts under certain conditions). The statute is designed to prevent unfair competition to stop a competitor from gaining a materially unfair competitive advantage, not to prevent general competition in the marketplace or inflict harsh or unnecessary results on employees. Edwards v. Harris, 964 So.2d 196, 197 - 198 (Fla. 1st DCA 2007). Therefore when Florida's Legislature drafted the statute, it required certain conditions be satisfied before a non-competition covenant would become enforceable in court. One of the conditions the Legislature required was demonstrating at least one of several "legitimate business interests" set forth in the statute. The proponent of the covenant must prove a "legitimate business interest," and that the specified contractual restraint is "reasonably necessary to protect the legitimate business interests." § 542.335(c), Florida Statutes. It would require a more lengthy discussion, beyond the scope of this article, to clarify the requirements of all of the statutory legitimate business interests and how all of them are interpreted and applied by Florida's courts. In the interest of brevity, this article provides an overview of how Florida courts interpret and apply two of the statutory legitimate business interests, namely:
Courts interpreting the wording "substantial relationships with specific prospective or existing customers" in § 542.335(b)(3) require that in addition to being "substantial," the relationship with the prospective or existing customer be with a specific, identifiable individual. The University of Florida, Board of Trustees v. Sanal, 837 So.2d 512, 515-516 (Fla. 5th DCA 2003). Unspecified references to prospective or existing customers are not enough to meet the statutory burden.
Courts interpreting the wording "valuable confidential business or professional information" in § 542.335(b)(2) require the information to be unique in the industry and confidential. Colucci v. Kar Kare Automotive Group, Inc., 918 So.2d 431, 439 (Fla. 4th DCA 2006) (reversing injunction because of, inter alia, insufficient proof of confidential business information proffered as a legitimate business interest). In addition, material and methods that are generic are not sufficient under the statute. Passalacqua v. Naviant, Inc., 844 So.2d 792, 796 (Fla. 4th DCA 2003) (reversing temporary injunction because, inter alia, "[t]he unrebutted testimony … thoroughly described material and methods that are generic and not proprietary").
Attorney Peter Mavrick practices in the field of business litigation and has successfully represented many businesses that have been threatened with legal action or which need to take legal action to protect their interests. This article is intended for information purposes only and is not legal advice. This article is not a substitute for legal advice tailored to a particular client's situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: email@example.com.