Non-Compete Agreements Continue to Evolve in Florida

DePuy Orthopaedics, Inc. v. Waxman

Under common law, non-compete clauses and agreements were generally rendered void and unenforceable as contrary to public policy and as unlawful restraints on trade. However, over the past several decades, the Florida Legislature has begun to loosen the reins on employers in allowing non-compete agreements to stand. Although earlier state laws greatly restricted the use of non-compete agreements, Section 542.335 of the Florida Statutes was drafted with a specific legislative purpose in mind. It allows employers to use non-compete clauses to prevent employees from the following:

• Obtaining sensitive trade and business secrets
• Establishing relationships with the employer’s existing customers
• Leaving the employer and divulging trade secrets to a competitor

In addition to the above, Florida courts are also demonstrating a willingness to validate non-compete clauses in favor of employers. According to a recent case issued by a Florida district court, certain types of otherwise unlawful non-compete clauses are now being ruled as valid, enforceable and even assignable by business entities. Specifically, in DePuy Orthopaedics, Inc. v. Waxman, 2012 WL 3138681 (FLA 1st DCA 2012), the First District Court of Appeal of Florida reversed the denial of a preliminary injunction finding that a covenant not to compete was assignable, despite the lack of the standard successor and assign language. As a result, the Waxman court ultimately ruled that the employer was entitled to a temporary injunction given that, inter alia (among other things), he would suffer irreparable injury if the non-compete clause was rendered invalid and would have no legal alternatives had the clause been invalidated.

If you are a business employer facing a lawsuit over the legality of a non-compete clause or require assistance in properly drafting one, you should contact an employment litigation attorney for assistance.