Introduction
In prior posts, I addressed how employers can enforce non-compete agreements in order to protect legitimate business interests. In this and upcoming blog posts, I will address some of the more common defenses employees, or former employees, can rely upon when an employer seeks to enforce a provision in a non-compete agreement.
There are many defenses to the enforcement of a non-compete agreement. Parties seeking to enforce the terms of a non-compete agreement often seek injunctive relief from the court. Generally speaking, courts view injunctions as “an extraordinary and drastic remedy which should be sparingly granted.” Cordis Corp. v. Prooslin, 482 So.2d 486 (3rd DCA 1986). The extraordinary nature of injunctive relief can work to the advantage of a party who is defending against enforcement of a non-compete. A person or party opposing the enforcement of a non-compete agreement should always consider whether the party seeking the injunctive relief has satisfied the burdensome requirements for an injunction.
Injunctive Relief
Before a court will grant a temporary injunction, the party seeking the injunction (often the employer) must plead and prove the following: (i) a likelihood of irreparable harm and the unavailability of an adequate remedy at law; (ii) a substantial likelihood of success on the merits; (iii) that the threatened injury to the party seeking injunctive relief outweighs any harm to the respondent; and (iv) that the granting of a temporary injunction will not diserve the public interest. Cordis, 482 So.2d at 489-90.
Any of the above prerequisites for injunctive relief may provide a party defending against a non-compete agreement with a valid defense. For example, if an employee can convince a court that an employer will not suffer, or cannot establish, a likelihood of irreparable harm, the court may refuse to enforce the non-compete agreement. Similarly, if a court is not convinced that the employer is likely to succeed on the merits at a final hearing, the court is not likely to grant a temporary injunction. See Lotenfoe v. Pahk, 747 So.2d 422, 425 (2nd DCA 1999)(dissolving a temporary injunction, due in part, to the court’s finding that during the evidentiary hearing there was insufficient evidence to find that the former employer was likely to succeed “in the face of the [employee’s] proffered defenses.”)
Other Defenses to Non-Compete Agreements
Under Florida Statute section 542.335(1), a non-compete clause is valid so long as the contract is reasonable in time, area and line of business. However, before a court will enforce a non-compete agreement, the court must consider all relevant legal and equitable defenses. Fla. Stat. 542.335(1)(g)(3). See also, Leighton v. First Universal Lending, LLC, 925 So.2d 462, 464 (4th DCA 2006). Common defenses to non-compete agreements include (i) a failure by the party seeking to enforce the non-compete to establish a legitimate business interest; (ii) the agreement sought to be enforced is overly broad; (iii) enforcement of the non-compete agreement would not serve the public interest; or (iv) the party seeking to enforce the non-compete agreement breached the agreement. In upcoming posts, I will address each of these defenses and how they can be applied in non-compete litigation.
