Is My Non-Compete Agreement Overbroad? When a Court May Decide to Limit the Geographic Scope of a Non-Compete
Many people sign non-compete agreements with their employers without necessarily taking the time to understand its precise terms. You may just assume the non-compete limits you to working for a competitor in the same town or county, especially when the agreement says as much. But while many non-compete agreements may purport to apply on a national or even worldwide scope, not all of these agreements are enforceable as written.
Under Florida law, a non-compete agreement in enforceable “so long as such contracts are reasonable in time, area, and line of business.” What is “reasonable” will depend on the nature of the employer’s operations and its “legitimate business interests.”
A Worldwide Non-Compete Is Not Necessarily “Reasonable”
As Florida’s First District Court of Appeals put it in the decision, Orkin Exterminating Co., Inc. v. Girardeau, “what is a reasonable area is a factual matter to be determined in each case.” So there may be situations where a statewide or even national non-compete could be held legal. But as with all non-compete agreements, the burden is on the employer–not the employee–to prove that a broad geographic scope is necessary to protect its legitimate business interests.
For example, in the case, GPS Industries, LLC v. Lewis, an employer attempted to enforce a global non-compete agreement against a former customer support manager. According to the agreement itself, the employer insisted that “given the global nature of Company’s business, there is no geographic limitation [to] the non-competition provision, and such provision shall be presumed effective world-wide.”
This particular employer sold GPS systems for use in golf carts. From its perspective, every golf course in the world was either an active or potential client for its products. The employer therefore insisted the global non-compete was reasonable.
Judge Kovachevich of the United States District Court for the Middle District of Florida disagreed. Indeed, Judge Kovachevich noted the employer failed to even present any evidence demonstrating how a global restriction was “reasonable” under Florida law. As such, the Court found such a restriction “patently unreasonable.”
Speak with an Attorney Before Signing Any Non-Compete Agreement
Once again, however, it is important to understand that what qualifies as a “reasonable” geographic area will depend heavily on the specific facts of each case. Take the previously mentioned Orkin Exterminating decision. There, the non-compete agreement only purported to cover several Florida counties in and around Jacksonville. The Court of Appeals still found that geographic area to be too broad in scope, largely because the employee himself had only ever worked for the employer in a single part of Jacksonville. The Court therefore defined “reasonable” as only that neighborhood.
So no matter how your employer chooses to phrase its own non-compete agreements, you should not assume that will be the final word. At the same time, you should never blindly sign such an agreement without first taking the time to understand its purported scope and restrictions. And if you require assistance, you should not hesitate to contact a qualified Florida employment law attorney.