Restrictive Covenants In Shareholders Agreements In Florida
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The 2024 Florida Statutes —As used in this chapter: (1) “Caregiver” means a parent, adult household member, or other person responsible for a child's welfare. (2) “Child” means any person under the age of 18 years.
Duration & Scope If the restriction is overly broad or unreasonable, it may be deemed unenforceable. A non-compete agreement also cannot prohibit an employee from engaging in any type of employment that is not related to the employer's company interests.
Florida statutes require that "the person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant." Fla. Stat. § 542.335(1)(b).
542.23 Equitable remedies. —In addition to other remedies provided by this chapter, any person shall be entitled to sue for and have injunctive or other equitable relief in the circuit courts of this state against threatened loss or damage by a violation of this chapter.
The inclusion of non-compete restrictions in a shareholders' agreement or an investment agreement can be a useful technique for companies to employ to ensure that a shareholder or investor cannot, either during their time holding shares in the company, or, for a specified period of time after, be involved in any ...
(b) “Covenant or restriction” means any agreement or limitation imposed by a private party and not required by a governmental agency as a condition of a development permit, as defined in s.
What specifically constitutes a “legitimate business interest” changes depending on the industry in which enforcement of the noncompete agreement is sought. Legitimate business interests are defined generally by Florida law to include, but not be limited to: Trade secrets, as defined in s. 688.002(4).
(1) Notwithstanding s. 542.18 and subsection (2), enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business, is not prohibited.
The primary remedy for breach of a Restrictive Covenant is a permanent injunction to restrain the breach. However, the courts have jurisdiction to award damages instead of an injunction.
If it looks like a restrictive covenant is enforceable and is going to be breached by development, seek to obtain a restrictive covenant title indemnity insurance policy to cover any loss from a claim from a beneficiary. You should insure the full gross development value of the property affected.
