Non-compete agreements or employment contracts containing restrictive covenants are a common hiring practice for physicians and some other types of medical professionals. Essentially, these agreements are designed to prevent a doctor from leaving and then competing against you, taking all your patients with them. Florida has a specific non-compete statute that relates to non-compete agreements that you must be aware of and follow carefully to ensure that your non-compete agreements are legally valid and enforceable.
Florida’s Non-Compete Statute Requirements
Florida Statute § 542.335 outlines the requirements that all non-compete agreements must fulfill to be legally valid. Generally, you must have a legitimate business interest to justify a non-compete agreement that is reasonable in time, place, and scope of restricted business activities.
Legitimate Business Interest
You must prove the existence of a legitimate business interest, or your non-compete agreement is legally invalid and unenforceable. Legitimate business interests may include one or more of the following:
- Trade secrets
- 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:
- An ongoing business or professional practice, by way of trade name, trademark, service mark, or “trade dress”;
- A specific geographic location; or
- A specific marketing or trade area
- Extraordinary or specialized training
Special Restrictions on Non-Compete Agreements for Physicians
However, Florida Statute § 542.336 states that restrictive covenants are void between a physician who practices a medical specialty in a county in which one entity employs or contracts with, either directly or through affiliated entities, all physicians who practice that specialty in the county. This statute specifically states that this situation does not create a legitimate business interest that would justify a non-compete agreement.
These non-compete agreements are invalid for three years from the date that a second entity that employs or contracts with one or more physicians who practice that specialty begins offering services in the county. By its nature, this statute is more likely to affect rural counties in which one healthcare provider monopolizes medical services, rather than metropolitan counties in which more than one healthcare provider is readily available.
Reasonableness of Time, Place, Scope
Under Florida’s non-compete statute, your non-compete agreement also must contain reasonable restrictions in terms of time, place, and scope. An agreement that prohibits a physician from ever working in the same type of medical practice or in the region ever again is not reasonable, and thus would not be a valid non-compete agreement.
You generally can restrict any activities in competition with your business while the physician is employed at your business and for a reasonable time after leaving your employment. For employment non-compete agreements not associated with the sale of a business, Florida law creates a presumption that restrictions of six months or less are reasonable, and restrictions of two years or more are unreasonable.
Florida’s non-compete statute also requires you to limit the competitive activities to a reasonable geographic area that is similar to the geographic area that your business serves. Finally, you typically should limit the restriction to the same type of medical practice as the doctor engage in while in your employment. Otherwise, your non-compete agreement may be overly broad and invalid.
Enforcing a Non-Compete Agreement
If a current or former employee is violating a non-compete agreement, you have the right to enforce that agreement under Florida law. You may be able to seek a temporary or permanent injunction to stop the person from continuing in the competitive activities that violate the non-compete agreement.
If you are successful in enforcing a valid non-compete agreement, you may be eligible to collection monetary damages from the person who violated the agreement. The court also may award the prevailing party attorney’s fees and costs.
The health law attorneys of Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. are ready to assist you in protecting your business by drafting and enforcing non-compete agreements. We know how hard you have worked to build your business, and we want to help you preserve it.
As a result, our objective is to develop contracts that best protect your business for the benefit of you and your family and to take legal action when necessary to enforce those contracts. Contact our office today at (954) 966-2112 or reach out to us online to schedule a time to discuss your legal issues with our attorneys.