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RESTRICTIVE COVENANTS AND NON-COMPETITION AGREEMENTS

Restrictive covenants and non-competition agreements are typically entered into between and employer and employee to limit an employee’s rights to compete with the employer once the employment relationship has been terminated. For all non-compete agreements effective after July 1, 1996, Florida Statutes, Section 542.335 governs the validity and applicability of such agreements. For non-compete agreements that were effective before July 1, 1996, Florida Statutes, Section 542.33 controls.

In order for a non-compete provision in an employment contract to be enforceable under the revised Florida law, it must be in writing and signed by the employee, and made to protect one or more of the employers’ legitimate business interests. The statute sets forth a nonexclusive list of legitimate protectable business interests:

1. Trade secrets;

2. Valuable confidential business or professional information that otherwise does not qualify as trade secrets under applicable state law;

3. Substantial relationships with specific prospective or existing customers, patients, or clients;

4. Customer, patient, or client goodwill associated with

a. An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress,”

b. A specific geographic location, or

c. A specific marketing or trade area, and

5. Extraordinary or specialized training.

An employer / employee non-compete agreement that is not associated with a sale of assets of a business is presumed to be reasonable if it imposes a restraint for six months or less. A non-compete agreement that restrains competition for more than two years is presumed to be unreasonable.

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Akers & Boswell, PA
2161 Palm Beach Lakes Boulevard, Suite 407
West Palm Beach, Florida 33406
(561) 547 6300 - (561) 828 9212 FAX