Florida 's non-compete statue, Fla Stat. § 542.335, governs non-compete agreements executed on or after July 1, 1996. Section 542.335 (1)(b) requires the party seeking to enforce a non-compete agreement plead and prove the existence of one or more legitimate business interest justifying the non-compete agreement (also known as a restrictive covenant). The statue lists five categories of legitimate business interests. These include such things as trade secrets, customer goodwill and employee training. The lists of legitimate interests protected under section 542.335 is non-exclusive. This means that Florida courts may enforce non-compete agreements that protect legitimate business interest not provided for in the statue.
In Balasco v. Gulf Auto Holding, Inc., 707 So. 2d 858 (Fla. 2d DCA 1998), Florida's Second District Court of Appeal enforced a non-compete agreement, in part, due to the court's recognition of a legitimate business interest that was not expressly identified in Florida's non-compete statue. Balasco involved the enforcement of a non-compete agreement against a former manager at a car dealership. The manager in Balasco, during the course of his employment with the dealership, signed a non-compete agreement. Under the agreement, the manager agreed not to solicit or influence other employees to leave the dealership. Id. at 859.
After leaving the dealership, the manager in Balasco allegedly convinced two of the dealership employees to come with him to a competitor. The dealership sought and received an injunction from the trial court enforcing the non-compete agreement against manager. Id. On appeal, the Second District affirmed in part the trial court’s injunction enforcing non-compete. The Second District recognized that the non-compete protected the dealership's "substantial investment" it made in the specialized training of its sales staff. Id. at 860.
Balasco is unique because the Second District recognized an additional legitimate business interest that was protected under Florida Law. The Second District in Balasco found that "we must also conclude that [non-compete] agreement furthers the legitimate business interest of promoting productivity and maintaining a competent and specialized sales team." Id. This reasoning shows a willingness by Balasco court to look beyond the business interests spelled out under the statue to see if others legitimate business interests are worth protecting.
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