Contracts In Restraint of Trade

Non-compete agreements and employment agreements containing non-compete provisions or other restrictive covenants are often referred to as contracts in restraint of trade. There are other types of contracts in restraint of trade as well, such as non-solicitation and non-circumvention agreements. The law on contracts in restraint of trade is determined on a state-by-state basis and in view of state and federal antitrust laws.

Florida law on contracts in restraint of trade has changed significantly over the past twenty years. Accordingly, business owners, especially those that have been in business for many years, must be careful regarding the scope and enforceability of employment agreements and agreements with independent contractors that contain non-compete provisions and other restrictive covenants.

The revised Florida statutes concerning contracts in restraint of trade are not limited to trade secrets. Restrictive covenants can be justified by other legitimate business interests, including, but not limited to:

  • valuable confidential business or professional information that otherwise does not qualify as trade secrets.
  • substantial relationships with specific prospective or existing customers, patients, or clients.
  • customer, patient, or client goodwill associated with (1) an ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress,”; (2) a specific geographic location; or (3) a specific marketing or trade area.
  • extraordinary or specialized training.

Subject to other requirements, Florida law provides for the enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business.

The attorneys at Espinosa Martinez PL are experienced in negotiating, drafting, reviewing, and providing counsel on contracts in restraint of trade. Additionally, ET Law is available to assist with the enforcement or defense of such contracts.