Articles Discussing Restrictive Covenants In Florida.

On August 14, 2024, the U.S. District Court for the Middle District of Florida in Properties of the Villages, Inc. v. Federal Trade Commission entered a limited injunction prohibiting the FTC from enforcing the Federal Trade Commission’s (FTC) non-compete rule against the named plaintiff, the Properties of the Villages, Inc.

In January 2019, Florida Senator Marco Rubio introduced the “Freedom to Compete Act” (the “Act”), which would limit an employer’s ability to enter into non-competition agreements with certain entry-level, low-wage employees. Additionally, the Act seeks to amend the Fair Labor Standards Act (FLSA) to void existing non-compete agreements — and outlaw any new non-compete agreements — between employers and employees classified as “non-exempt” under the FLSA. Employers who violate provisions of the Act “shall be liable for such legal or equitable relief as may be appropriate to effectuate the purposes of such section.”

Executive Summary: On Thursday, September 14, 2017, the Florida Supreme Court held that referral sources can be valid legitimate business interests under Florida’s non-compete statute, potentially warranting enforcement of a restrictive covenant/non-compete agreement. In determining whether referral sources can be legitimate business interests, the Court closely analyzed the statute’s plain language and engaged in a fact- and industry-specific inquiry.

Businesses seeking injunctive relief to enforce non-competition agreements in Florida might be required to show the confidential information they seek to protect is neither unnecessary nor outdated, according to a recent ruling in Transunion Risk and Alternative Data Solutions, Inc. v. Challa, 2016 U.S. Dist. LEXIS 166346, Case No. 9:15-cv-91049 (S.D. Fla. March 23, 2016).

A recent case from Florida’s Fifth District Court of Appeals underlines the importance for employers to provide a sufficient legitimate business interest to justify enforcement of a non-compete agreement. Where a former employee or contractor is interfering with client relationships, the employer must be careful to point out specific prospective or existing clients when enforcing a non-compete agreement.

Federal courts must balance the potential harm to the former employee with the threatened injury to the party seeking to enforce a non-competition agreement when deciding whether to grant an injunction enforcing the agreement, a federal appeals court in Atlanta has ruled, possibly changing how courts evaluate restrictive covenants in employment agreements in Florida.