LEGAL UPDATE: Are My Non-Competes/Non-Solicits Enforceable in Florida? What Employers Need to Know

by Robert Paradela, Jr.

 

Employees are the lifeblood of every company. That is why companies who invest substantial amount of time, money, and effort into their employees often protect their interests by requiring their employees to sign non-competition and non-solicitation agreements[1]. However, restrictive covenants came under attack when Federal Trade Commission (FTC) announced its rule banning all non-competes nationally.

However, despite the FTC’s attempts to ban non-competes, they remain enforceable in Florida. This article provides an update as to the enforceability of non-competes and what employers in Florida should be thinking about as they draft their restrictive covenants to ensure they are enforceable.

Recent National Developments Affecting Non-Competes

1. FTC’s Nationwide Ban on Non-Competes
   In April 2024, the Federal Trade Commission (FTC) finalized a rule banning nearly all non-compete agreements nationwide, citing concerns about stifled competition and worker mobility. The rule invalidated existing non-competes for most workers, except for senior executives (defined as those earning over $151,164 annually in policy-making roles) and agreements tied to the sale of a business.
2. Legal Challenges and Court Rulings
   The FTC’s rule faced immediate litigation. Key developments include:
   • Federal Courts Weigh In: A Texas federal court preliminarily blocked the rule in April 2024, and the Middle District of Florida followed suit in August 2024, ruling that the FTC overstepped its authority by addressing a “major question” without clear Congressional approval.
   • While courts in Texas and Florida sided against the FTC, a Pennsylvania court upheld the rule, creating significant uncertainty as to whether the rule still applied.
   • Current Status: As of January 2025, the rule remains enjoined nationwide pending further litigation. The U.S. Chamber of Commerce and other business groups continue to challenge its validity.
3. Political Shifts Impacting the FTC’s Agenda
   With the change in presidential administration, the FTC is unlikely to prioritize enforcing the non-compete ban. The FTC’s new chair, Andrew Ferguson, appointed by President Trump, has historically opposed the agency’s non-compete ban, arguing it exceeds the FTC’s statutory authority and aligns with his view that such regulation should be left to states. Given his public dissent against the rule and the administration’s pro-business stance, Ferguson is unlikely to pursue the ban further and may withdraw pending appeals, effectively ending the FTC’s push to enforce it.

So the FTC’s ban doesn’t apply. How do I ensure my restrictive covenants are enforceable?

While the FTC’s rule is stalled, Florida employers must continue to rely on Florida Statute § 542.335, which governs restrictive covenants. To enforce a non-compete or non-solicitation agreement in Florida, the following criteria must be met:

1. Legitimate Business Interest
   The first step is ensuring that the restrictive covenant protects a “legitimate business interest.” In other words, there must be a reason why your company needs to prevent the employee from working with a competitor (or soliciting your customers). Examples of legitimate business interests include:
   • Trade secrets and confidential business information
   • Substantial client, patient, or customer relationships
   • Extraordinary or specialized training investments
2. Reasonableness in Scope
   Even if the restrictive covenant protects a legitimate business interest, the restrictive covenant needs to be “reasonable” in:
   • Duration: Typically no longer than necessary to protect the interest. Courts in Florida have generally held that restrictive covenants over 2 years are presumptively unreasonable, whereas restrictive covenants six months or less are presumptively reasonable.
   • Geographic Scope: Limited to areas where the employee operates. For example, a restrictive covenant preventing an employee in charge of Miami-Dade country from working in Seattle would be unreasonable.
   • Line of Business: Restricted to activities that directly compete with the employer. In other words, companies typically cannot prevent an employee from working in a job that is completely different from the one they work at their current employer.

Need more guidance on creating or enforcing your restrictive covenants?

The evolving regulatory environment underscores the importance of proactive legal counsel. Our firm regularly helps our clients with the following tasks:

1. Agreement Drafting and Review: We can help draft your non-compete and non-solicitation agreements to ensure they are enforceable in Florida and amongst the shifting federal landscape. We can also review any current restrictive covenants to ensure they are enforceable.
2. Enforcement Strategy: If you need to enforce an agreement, we will evaluate its validity under Florida Statute § 542.335 and craft a litigation strategy tailored to recent case law.
3. Advice on Tricky Hiring: You are considering hiring a key employee from a competitor. The only problem? They have a non-compete which might prevent them from working at your company. Our team can help you navigate this risk and analyze whether your competitor can enforce its non-compete against you.
4. Litigation Defense: Have you or your employee received a threatening letter from a competitor alleging that you breached the employee’s restrictive covenants? We can help respond to the letter and defend you and the employee in any litigation that might follow.

For inquiries as to how Wicker Smith attorneys can assist with Labor & Employment matters, contact a member of our Labor & Employment team.

[1] Collectively known as “restrictive covenants.”