The Enforceability of Non-Compete Agreements for Swimming Pool Companies in Florida
Non-compete agreements are a common tool used by swimming pool companies to protect their interests when employees or independent contractors leave the company. These agreements are crucial to keep former employees from using confidential business or professional information substantial client relationships, or specialized training gained by working for the company to start competing businesses. In Florida, the enforceability of non-compete agreements is favored by the courts, and they consider several factors.
Florida’s Legal Framework for Non-Compete Agreements
Florida law generally upholds non-compete agreements under Section 542.335 of the Florida Statutes, if they meet specific criteria. The agreement must be:
In Writing – Non-compete agreements must be in writing and signed by the former employee.
Reasonable in Time, Geographic Location, and Business Area – Courts will assess whether the restrictions are reasonably necessary to protect the company's legitimate business interests.
Justified by a Legitimate Business Interest – A company has the burden to demonstrate that the non-compete is necessary to protect confidential information, trade secrets, substantial client relationships, or specialized training provided to the employee.
Courts cannot consider Hardship – Courts are not permitted to consider whether the non-compete agreement imposes a hardship on the former employee or if it excessively limits an individual’s ability to earn a living.
Key Considerations When Litigating Non-Compete Agreements
If a former employee or independent contractor violates a non-compete agreement, swimming pool companies should consider the following factors before pursuing litigation:
Likelihood of Success: Assess whether the agreement meets Florida’s legal standards and has a strong chance of being upheld in court. However, if the agreement restricts an employee beyond what is necessary to protect the legitimate business interest, courts must modify the restraint and grant only the relief necessary to protect the legitimate business interest.
Immediate Harm to the Business: Demonstrate how the former employee’s actions are causing direct financial harm, such as loss of customers or misuse of trade secrets.
Evidence Collection: Gather strong evidence, such as customer solicitations, confidential information misuse, or communications showing a breach of the agreement.
Defenses Raised by the Employee: Be prepared for defenses, such as claims that the agreement is overly broad, unreasonable in its scope, duration, or geographic reach, lacks consideration, or is not necessary to protect a legitimate business interest. Another common defense is that the non-compete agreement violates public policy. A court must find that the specified public policy requirements substantially outweigh the need to protect the company’s legitimate business interest.
Alternative Dispute Resolution: Evaluate whether mediation or settlement may be a more cost-effective and expedient option rather than prolonged litigation.
Possible Remedies
Temporary and Permanent Injunctions: Consider seeking an injunction to prevent the former employee from continuing the competing business while litigation is pending.
Lost Profits: A company must prove with reasonable certainty that it actually lost profits because of the independent contractor’s breach of the non-compete agreement.
Liquidated damages: Can be awarded if included in the non-compete agreement.
Attorney’s Fees and Costs: Consider the financial implications of litigation and whether the agreement includes an attorney’s fees provision that allows for recovery of legal expenses.
Conclusion
When litigating a non-compete agreement, swimming pool companies must carefully evaluate their legal position, the strength of their claims, and the potential defenses that may be raised. Seeking legal counsel early in the process can help companies navigate litigation effectively and increase the likelihood of enforcing their agreements in court.