Each of the states within the Eleventh Circuit governs the use of restrictive covenants through statutes. Generally, both Florida and Alabama permit the use of restrictive covenants where the restrictive covenant is “reasonably necessary” to protect a legitimate business interest, but the legitimate business interest requirement is applied differently in both jurisdictions. Alabama law prohibits any contract that prevents an individual from exercising a lawful profession, trade, or business of any kind, unless it falls within one of the 6 restrictive covenant exceptions specified in the statute. Florida, however, permits the enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, provided that such contracts are reasonable in time, area, and line of business. Georgia, which recently amended its statute, used to be one of the most difficult states in which to enforce restrictive covenants against employees. It now permits Georgia courts to partially enforce overbroad restrictive covenants.

State

Statutes Governing Restrictive Covenants

Requirements for Enforcement of Restrictive Covenants

Alabama AL ST § § 8-1-190 to 8-1-197
  • Agreement must be in writing, signed by all parties, and supported by adequate consideration.
  • The party resisting enforcement of the covenant has the burden of proving the existence of undue hardship, if raised as a defense.
  • Does not eliminate professional exemptions recognized by Alabama law.
  • Where restrictive covenant is “overly broad” or “unreasonable in its duration,” court may void the restraint in part and reform it to preserve the protectable interest.
  • If restrictive covenant does not come within the 6 restrictive covenant exceptions (including non-solicitation and non-competition agreements), court may void restraint “in its entirety.”
Florida FL ST § 542.335
  • Reasonable in time, area, and line of business.
  • Agreement must be in writing, signed by all parties.
  • Must be “reasonably necessary” to protect a “legitimate business interest” justifying restrictive covenant. Otherwise covenant is unlawful, void, and unenforceable.
  • Duration of more than 2-10 years, depending on whom the restrictive covenant is being enforced against, implies a rebuttable presumption of unreasonableness.
Georgia GA ST § § 13-8-50 to 13-8-59
  • Non-compete must have a geographical limitation. A customer non-solicit need not.
  • In some cases, courts can consider the economic hardship imposed on employee by enforcement of covenant in determining its reasonableness.
  • Duration of more than 2-5 years, depending on whom the restrictive covenant is being enforced against implies a rebuttable presumption of unreasonableness.
  • Court may “modify” an overbroad restrictive covenant provision. Court may strike out or remove language that renders covenant unenforceable, but it cannot rewrite or otherwise add language.
  • A non-compete provision may only be enforced against an employee who:
    1. customarily and regularly solicits customers or prospective customers;
    2. customarily and regularly engages in making sales;
    3. has a primary duty of managing a company, or one of its departments or subdivisions, directs the work of two or more employees and has the authority to hire or fire other employees; or