Tuesday, February 17th, 2015 | Author:

What happens if litigation lasts longer than the duration of the non-compete?

Many non-compete agreements, for example, have a restrictive period of two years but those agreements do not specify that this restricted period should be extended in the event of litigation.  Thus, it’s possible that litigation may take longer than the entire restrictive period such that an employee could violate the agreement and work directly for a competitor without penalty.  So, the question becomes:  should the non-compete period be extended if litigation becomes necessary even if the agreement is silent on the issue?  The Fourth District Court of Appeal answered the question in the affirmative.  In Anakarli Boutique, Inc. v. Ortiz, 152 So. 3d 107 (Fla. 4th DCA 2014), the Court stated, “It would be stunningly unfair if the law held that a valid non-compete clause could be nullified because the non-compete period was devoured by the time it took to appeal an erroneous ruling on the interpretation of the clause.  Where there has been a delay in the entry of a non-compete injunction enforceable under section 542.335(1)(c), the party seeking to enforce the non-compete clause is entitled to receive the benefit of its bargain, which is the enforcement of the full non-compete period specified in the agreement between the parties.”  Thus, even if the agreement is silent, Florida law would suggest that the restrictive timeframe would be extended by the period of time it took to litigate the enforcement of the non-compete agreement so that an employer could obtain the full benefit of the entire restrictive period.