FLORIDA LAW ON NON-COMPETITION COVENANTS: REWRITING CONTRACTUAL TERMS

Florida statutes on non-competition covenants allow courts to modify overbroad non-competition covenants. For example, a non-competition covenant restricting an employee from competing against the employer in every county in Florida is likely overbroad if the employer conducts business only in Broward County. Florida statutes, however, allow the court to modify such overbroad non-competition covenants and grant “reasonably necessary” relief, i.e., modify the covenant to apply only to Broward County.

Under Florida contract law, however, courts generally will not rewrite the terms of a contract. Although Florida statutory law allows courts to modify overbroad non-competition covenants, Florida courts have otherwise refrained from rewriting non-competition covenants.

In Advantage Digital Sys. v. Digital Imaging Servs., 870 So. 2d 111 (Fla. 2d DCA 2003), two employees were bound by non-competition covenants that restricted them from “soliciting” the employer’s customers. The trial court found the non-competition covenants enforceable and ordered that the employees were prohibited from “having any contact, whatsoever, with any customers of [the employer].” Advantage Digital Sys., 870 So. 2d at 114-15. On appeal, the appellate court disagreed with the trial court’s order. The appellate court held that the trial court’s order went “far beyond prohibiting solicitation” and “essentially and impermissibly rewrites the parties’ agreements by disallowing any ‘contact’ with [the employer’s] customer. … Because the noncompetition agreements prohibit only solicitation, that is the only activity that can be the subject” of the court’s order. Advantage Digital Sys., 870 So. 2d at 115.

More recently, in Heiderich v. Fla. Equine Veterinary Servs., 86 So. 3d 527, 530 (Fla. 5th DCA 2012), Dr. Heiderich, a veterinarian, signed a non-competition covenant with her employer, which restricted her from owning or being employed by any veterinary practice located within a 30-mile radius of the employer’s place of business. After ending her employment, Dr. Heiderich started her own veterinarian practice outside the 30-mile radius of the non-competition covenant. However, Dr. Heiderich delivered her veterinarian services to customers within the 30 mile radius. The former employer sued to enforce the non-competition covenant and argued that the covenant prohibited Dr. Heiderich from “practicing” veterinarian services within the 30-mile radius. While the trial court agreed with the employer, the appellate court disagreed.

The appellate court in Heiderich held that the non-competition covenant restricted Dr. Heiderich only from owning or being employed by a veterinarian practice located within the 30-mile radius; it did not restrict her from practicing veterinarian services within the 30-mile radius. Because Dr. Heiderich opened her business outside the 30-mile radius, she did not breach the non-competition covenant.

As discussed in a previous article, Florida law requires that courts read non-competition covenants in favor of providing reasonable protection to a company’s legitimate business interests. However, as the above cases demonstrate, Florida courts generally will not grant protection beyond what the terms of a non-competition covenant provide.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation. This article is not a substitute for legal advice tailored to a particular 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: peter@mavricklaw.com.