The non-compete clause is governed by Section 542.335 of the Florida Statutes, which regulates the enforceability of restrictive covenants. Homeowners and employees are affected by this statute, as it dictates the terms under which they can work multiple jobs.
As of January 1, 2020, a $1 million revenue threshold applies to the enforcement of non-compete clauses.
Non-Compete Clause Standard
The non-compete clause standard is set forth in Section 542.335 of the Florida Statutes, which requires that any restrictive covenant be reasonable in time, area, and line of business. The court will consider a 2-year time limit and a 50-mile geographic area to be reasonable. In plain terms, this means that a non-compete clause must be narrowly tailored to protect the employer’s legitimate business interests.
This is where the law gets teeth, as Section 542.335 also provides that a court may modify an overbroad or unreasonable restrictive covenant to make it enforceable. For example, if a non-compete clause prohibits an employee from working in a certain industry for 5 years, the court may reduce the time limit to 2 years to make the clause reasonable.
In practice, this means that employers must carefully draft non-compete clauses to ensure they are reasonable and enforceable. A $5,000 penalty may be imposed for violating the statute, and the court may also award attorney’s fees to the prevailing party.
When the Answer is Yes
In certain circumstances, an employee may work two jobs without violating their non-compete clause. For example, if the employee is working in a different industry or geographic area, the non-compete clause may not apply. Section 542.335 allows for exceptions to the general rule, such as when the employee is working for a family member or in a limited capacity. A 30-day notice period is required for termination of the non-compete agreement.
The employee must also comply with the terms of the non-compete clause, which may include a $10,000 payment to the employer upon termination of the agreement. In plain terms, this means that the employee must carefully review the terms of their non-compete clause to determine whether they can work multiple jobs without violating the agreement.
When the Answer is No
When an employee works two jobs and violates their non-compete clause, the employer may seek injunctive relief and damages. Section 542.335 provides that the employer may recover actual damages, including lost profits, as well as attorney’s fees and costs. A $50,000 fine may be imposed for willful violation of the non-compete clause.
The court may also impose a 6-month injunction to prevent the employee from continuing to work in violation of the non-compete clause. In practice, this means that employees must carefully consider the terms of their non-compete clause before taking on additional employment, as the consequences of violating the clause can be severe.
The Process
To enforce a non-compete clause, the employer must file a complaint with the court and serve the employee with a summons and complaint. The employer must also post a $25,000 bond to secure the employee’s potential losses. Section 542.335 requires that the complaint be filed within 90 days of the alleged violation.
The employee may respond to the complaint by filing an answer and counterclaim, and the court may schedule a hearing to determine the enforceability of the non-compete clause. In plain terms, this means that the employer and employee must follow a specific process to resolve disputes related to non-compete clauses, which may involve filing fees and court costs totaling $1,000.
This is where the law gets teeth, as the court may impose sanctions on the parties for failing to comply with the rules of procedure. For example, if the employer fails to post the required bond, the court may dismiss the complaint.
State-by-State Variation
While Section 542.335 of the Florida Statutes provides a general framework for non-compete clauses, other states have their own laws and regulations. For example, California has a $500,000 revenue threshold for the enforcement of non-compete clauses, while New York has a 1-year time limit for restrictive covenants.
In Texas, the non-compete clause standard is set forth in Section 15.50 of the Texas Business and Commerce Code, which requires that any restrictive covenant be reasonable in time, area, and line of business. A $20,000 fine may be imposed for violating the statute, and the court may also award attorney’s fees to the prevailing party.
Special Situations or Exceptions
Parking Protections
In certain circumstances, an employee may be exempt from the non-compete clause due to a specific exception. For example, if the employee is working in a parking garage or lot, the non-compete clause may not apply. Section 542.335 provides that the court may consider the specific circumstances of the case when determining the enforceability of the non-compete clause.
Threshold Requirements
The threshold requirements for non-compete clauses vary by state. For example, in Illinois, the non-compete clause must be in writing and signed by the employee, and the employer must provide the employee with at least 2 weeks’ notice before terminating the agreement. A $15,000 payment may be required to release the employee from the non-compete clause.
Enforcement and Consequences
The enforcement of non-compete clauses is typically governed by state law, and the consequences of violating a non-compete clause can be severe. Section 542.335 provides that the employer may recover actual damages, including lost profits, as well as attorney’s fees and costs. A $100,000 fine may be imposed for willful violation of the non-compete clause.
In practice, this means that employers must carefully draft non-compete clauses to ensure they are reasonable and enforceable, and employees must carefully review the terms of their non-compete clause to determine whether they can work multiple jobs without violating the agreement. The court may also impose a 1-year injunction to prevent the employee from continuing to work in violation of the non-compete clause.
- U.S. Department of Labor. relevant wage or leave regulation
- U.S. Equal Employment Opportunity Commission. workplace discrimination guidance
- Office of the Law Revision Counsel. relevant federal employment statute
