Non-Compete Agreements in Florida: FTC Ban & Enforceability

The Federal Trade Commission’s attempted ban on non-compete agreements has created uncertainty for Florida business owners, executives, and their legal counsel. While the FTC’s ban faced judicial challenges and has been partially blocked at the federal level, the implications for Florida businesses are significant. Adam Ludwin, a civil litigation attorney in Florida, explains the current status of non-compete law in Florida and what business owners and employees need to know.

The FTC Non-Compete Ban: What Happened

In January 2023, the FTC voted to propose a sweeping ban on non-compete agreements, arguing they restrict worker mobility and suppress wages. However, the FTC’s authority to issue such a broad ban was immediately challenged by business groups, and in 2024, a federal judge blocked the FTC’s ban, ruling that the agency exceeded its authority. For Florida businesses, the federal uncertainty means they should not assume that federal law prohibits non-competes. However, the FTC action signals a broader trend toward scrutinizing non-compete agreements.

Florida’s Legal Standard for Non-Competes

Florida law on non-competes is found in Florida Statutes § 542.335, which states that non-compete agreements are enforceable if they are: reasonable in time (typically not exceeding two years); reasonable in area or territory (geographically limited to where the business actually operates); reasonable in line of business (limited to the specific business in which the employee was engaged); and supported by legitimate business interests (protecting trade secrets, confidential information, or substantial ongoing business relationships). Florida courts have consistently applied these reasonableness standards and have been willing to strike down overly broad non-competes or modify them to reach a reasonable scope.

Current Status of Non-Compete Enforcement in Florida

Following the FTC’s legal setback, Florida’s legal environment for non-competes remains stable. State courts continue to apply the reasonableness test and will enforce properly drafted non-competes. However, courts increasingly view overly broad geographic or temporal restrictions skeptically, require employers to clearly identify the legitimate business interest being protected, and scrutinize whether the employee’s role actually involved access to protectable trade secrets or confidential information.

What Business Owners Should Do Now

If you have non-compete agreements in place with key employees or executives: audit existing agreements to ensure they meet the three-part reasonableness test under Florida law; when drafting new non-competes, include clear recitals identifying the legitimate business interests being protected; tailor non-competes to actual protectable interests rather than using blanket restrictions; and maintain clear records of what was deemed confidential. Consider whether non-disclosure agreements or customer non-solicitation clauses may achieve your objectives with less legal risk.

What Employees Should Know

If you are bound by a non-compete agreement, know that if it is unreasonable in time, area, or scope, it may be unenforceable. An experienced civil litigation attorney can challenge enforceability in court. Even if a non-compete is partially overbroad, Florida courts may modify it to reasonable terms rather than strike it entirely.

When to Seek Legal Help

Whether you are an employer seeking to enforce a non-compete or an employee challenging one, the stakes are high. Contact Adam Ludwin at Ludwin Law Group for experienced guidance on non-compete disputes and civil litigation in Florida.