It is often stated that non-compete agreements, in order to be enforceable, must be reasonable in both the duration and scope. Duration refers to the length of time for which a non-compete agreement remains valid and enforceable. Scope, on the other hand, refers to the geographic scope – the area in which the non-compete agreement will be enforced. This post will look at what constitutes a reasonable amount of time to enforce non-compete agreements under Florida law.
Florida's non-compete statute, Fla. Stat. § 542.335, creates rebuttable presumptions as to when a non-compete agreement's duration provision is enforceable. By that, the statute provides that the court "shall presume" a non-compete agreement between an employee and employer is reasonable if the non-compete agreement is enforceable for six months or less. If an employee and employer enter into a non-compete agreement that is enforceable for more than two years, such agreements are presumed under the statute to be unreasonable.
Note that Florida's non-compete statute creates no presumption for or against employer/employee non-compete agreements that have duration provisions between six months and two years. Further, although the statute creates presumptions for and against enforcement, the presumptions may be rebutted if a party shows a reasonable basis for the relevant duration provision.
Section 542.335's presumptions concerning duration vary depending on the type of non-compete being enforced. If the non-compete agreement is being enforced against an employee, the duration of the agreement must be shorter (six months) in order to be presumed reasonable. In contrast, non-compete agreements enforced against a distributor or the seller of a business are allowed greater durations. Non-compete agreements enforced against a distributor, dealer, franchisee or licensee of a trademark are presumed reasonable if the duration is for one year or less. Under section 542.335(1)(d)(3), non-compete agreements enforced against a seller of a business are presumed reasonable if the duration is three years or less.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.