Florida Non-Compete Agreements: Common Misconceptions

Let me put it bluntly:  People are confused about non-compete agreements and non-compete law.  By people, I mean almost everybody.  I’m not just about the average Joe.  I’m talking about business owners.  I’m talking about doctors.  And yes, I’m talking about other lawyers.  Two years ago, I left a prominent New York litigation firm and launched my own litigation practice.  I immediately began focusing on non-compete and trade secret litigation.  Over the past two years, I have received hundreds of phone calls and emails about non-compete cases.  I have represented dozens of clients in resolving non-compete disputes either through litigation or out of court.  Most of these cases have involved Florida law.  But, due to choice of law provisions, I have also been involved in non-compete disputes that were governed by the law of other states, including New York, Illinois, Indiana, Mississippi, North Carolina, and Pennsylvania.  Given my experience, I have reached a number of conclusions about the general landscape— about the intersection of business and non-compete law.  One of those conclusions:  People are confused about non-compete agreements.

Every week, I receive at least a few phone calls from people who have absolutely no understanding of the legal landscape.  Most of the time, these people are calling to ask for my advice about a non-compete situation, but they preface their story by saying something like, “The non-compete won’t hold up in court, right?”  Quite often, that is wrong.  Quite often, the non-compete will hold up in court, especially under Florida law.  So, here are some of the most common misconceptions about non-compete agreements.  This is based on Florida law, but may also have some applicability to other jurisdictions:

(1) The Non-Compete Won’t Hold Up in Court:  I usually hear this basic assertion – with nothing behind it – from people who are lower-level employees.  Sometimes, I hear it from sales executives.  People in Group 1 believe that non-compete agreements are generally unenforceable, or, that a non-compete agreement could not be enforced against them because they were a low level employee.  At least under Florida law, this sort of logic is bogus.  An interesting side note:  These people are almost always men.  I have never had a woman call me about a non-compete situation and come out of the gate with, “It won’t hold up in court, right?”

(2) But Florida is a Right to Work State:  People in Group 2 are similar to the people in Group 1.  But people in Group 2 don’t just claim that they non-compete agreement will not “hold up in court.”  They go a step further:  They offer a justification for why the non-compete will not be enforced.  That justification:  Florida is a Right to Work state.   For all the people in Group 2, let me quickly disabuse you of that notion:  Right to Work laws have to do with unions, not with non-compete agreements.  For a more detailed discussion of this issue, please visit my main website.

(3) They Forced Me to Sign It:  People in Group 3 take the following angle:  My company forced me to sign a non-compete agreement or lose my job, so it should be unenforceable.  This is irrelevant.

(4) I Signed the Non-Compete After I Worked There for a Year:  Group 4 people argue that they accepted a job, worked at a company for months or years, and then were forced to sign a non-compete agreement.  Their angle:  They didn’t get a raise, they didn’t get a bonus, they didn’t get anything.  In legal terms, this is the non-compete / no new consideration argument.  This is a viable defense to enforcement of a non-compete agreement in some states, but not in Florida.  Under Florida law, continued employment is considered sufficient consideration in exchange for a covenant not to compete.

(5) But They Can’t Have a Nationwide Non-Compete:  Group 5 people understand that their non-compete agreement may be enforceable to some extent, but they think that a nationwide non-compete automatically is unenforceable.  Wrong.  If a sales executive has a national territory, a national non-compete in that same industry could be enforceable.

(6) But I’m a Doctor! : I see it all the time.  Doctors assume that non-compete agreements cannot be used to prevent them from keeping their existing patients.  Although I firmly believe that enforcing physician non-compete agreements is bad public policy (see these articles from the non-compete blog), Florida law currently allows enforcement of such agreements.

 

Jonathan Pollard is a trial lawyer and litigator based on Fort Lauderdale, Florida. He focuses his practice on defending non-compete and trade secret claims. Jonathan routinely represents doctors, corporate executives and other high level employees who are switching companies, or, who have started their own ventures. Beyond litigation, Jonathan advises employees, companies and business owners regarding restrictive covenant issues in connection with employment contracts, separation agreements, hiring decisions, the purchase or sale of business interests and the execution of commercial leases. Jonathan has been interviewed about non-compete issues by reporters from INC Magazine, the BBC and The Tampa Bay Times. He is licensed in all Florida federal and state courts and routinely represents clients in Miami, Fort Lauderdale, West Palm Beach, Fort Myers, Tampa, Orlando and Jacksonville.  His office can be reached at 954-332-2380.  For more information, please visit For more information, visit http://www.pollardllc.com.

C0190

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s