Under Florida law, restrictive covenants are generally unenforceable under Florida law as restraints on trade. Section 541.18, Florida Statutes, states that “[e]very contract, combination or conspiracy in restrain of trade or commerce in this state is unlawful.” Precedent from the Supreme Court of Florida in White v. Mederi Caretenders Visiting Servs.…
In Florida, an injunction is the generally favored remedy in cases of breach of a non-compete agreement. The Supreme Court of Florida in Miller Mechanical, Inc. v. Ruth, 300 So.2d 11 (Fla. 1974), explained that in cases of breach of a restrictive covenant, “[t]he Court may award damages for breach…
Many non-compete agreements contain covenants asserting that the employer business has protectible trade secrets. A contractual provision where the parties agree, ex ante, that the employer will have (or actually has) a “trade secret” does not thereby mean the employer will have (or has) a trade secret in the future. …
Businesses sometimes suffer from disloyal employees who misappropriate trade secrets and confidential information, diverting them to competitors. Such unfair competition can be addressed through contractual claims based on non-compete agreements as well as claims for trade secret misappropriation. Because Florida’s restrictive covenant statute, Florida Statutes Section 542.335, provides strong remedies…
In Florida, it is common for shopping centers to have leases with “exclusivity covenants” allowing a commercial business the exclusive right to operate its type of business in the shopping center. For example, a shopping center may have a grocery store as an anchor tenant, i.e., a tenant that provides…
Much of non-compete agreement litigation centers on the availability of obtaining a preliminary injunction barring competition. As the United States Court of Appeals for the Eleventh Circuit explained in United States v. Lambert, 695 F.2d 536 (11th Cir. 1983), a preliminary injunction is “an extraordinary and drastic remedy” that is…
Under Florida’s non-compete statute, Florida Statutes Section 542.335(1)(b), “[t]he person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant.” The term “legitimate business interest” includes trade secrets (as defined in Florida Statutes Section 688.002(4)) and “valuable…
Florida law specifies, at Florida Statutes section 542.335, how and when a restrictive covenant (such as a non-compete agreement or non-solicitation agreement) may be enforced against a current or former employee. In a lawsuit to enforce an agreement that restricts or prohibits competition during or after the term of the…
The State of Florida enacted Florida Statutes Section 542.335 to allow non-compete agreements where there is a “legitimate business interest.” Two frequently cited “legitimate business interests” are confidential information and trade secrets. In an employment context, a non-compete agreement based on “[v]aluable confidential business or professional information” (referenced in Florida…
An important consideration when buying a business, whether via a stock purchase agreement or an asset purchase agreement, is whether the seller will take the sale proceeds and start a new, competing business. Typically, the seller would have a competitive advantage in competition with the new buyer of the business,…