Language Matters in Non-Competes

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Non-compete clauses are common provisions in employment contracts. Sometimes they work and sometimes they do not, depending on how well they are written. Courts may refuse to enforce a non-compete on public policy grounds, especially if the provision is seen as overly restrictive; other courts might enforce a non-compete while resolving ambiguities in favor of the employee. Careful drafting is essential.

A standard employment contract for a veterinary clinic in Florida included a non-compete clause with the following language: For two years after termination of employment, a veterinarian “shall not own, manage, operate, control, be employed by, assist, participate in, or have any material interest in any business or profession engaged in general equine veterinary practice located within a thirty (30) mile radius” of the employer’s clinic.

This non-compete sounds all-inclusive, but things didn’t work out as planned when tested in court.

After an employee veterinarian lost her job, she opened her own clinic. The legal issue was not the physical location of the new clinic—it was outside the 30-mile limit—but the fact that some of the new clinic’s clients lived inside the non-compete “no-man’s land.” The former employer filed a lawsuit, and the trial court agreed that the veterinarian was violating the non-compete clause.

A state appellate court reversed the lower court’s decision. Although the non-compete clause clearly prohibited locating a new clinic within 30 miles of the former employer, the court explained that “the parties’ non-compete agreement did not prohibit [the former employee] from providing equine veterinary services within the 30-mile radius” set out in the contract. The seemingly well-written clause restricted the physical location of a competing clinic, but did not address where the former employee could provide veterinary services.

This references Case No. 5D11-567, District Court of Appeal of the State of Florida Fifth District, March 30, 2012.