Friday, June 21, 2019

Is the Florida Noncompete Statute Unconstitutional? Probably

In light of the infamous Supreme Court decision of Burwell v. Hobby Lobby Stores, Inc., most corporations are "persons" under the U.S. Constitution. Regarding the noncompete statute, corporations should thus be treated as a “person” for purposes of constitutional analysis. 

If corporate people have equal rights with those of individuals for purposes of free speech and religious liberty, so do human people have equal rights with corporate persons for purposes of equal protection under the law.

Thus, the Florida noncompete statute, Fla. Stat. § 542.335, likely violates the Equal Protection Clause of the U.S. Constitution and the Florida Constitution (Article I Sec. 2) in that it prohibits the court from considering undue hardship on employees, but allows consideration of hardship on employers.

In most noncompete lawsuits, employees have been classified from their former employers separately based on a difference, that is, former employee and former employer, which has no reasonable relationship to the ban on considering undue hardship for one side only. If the Florida legislature wants to protect trade secrets, it has already done so through a separate statute. This entire statute treats employees and employers arbitrarily and differently with no rational basis.

If the employees in noncompete litigation were corporations instead of individuals and entered into an agreement limiting their ability to compete or poach customers, there is no doubt they would be prosecuted for antitrust violations.

This statute creates an imbalance by considering only hardship on the employer with no ability to use equity to balance the hardships to the individual human employees.

Furthermore, the provision of the statute prohibiting the courts from balancing the equities likely violates the Florida Constitutional provision governing access to the courts, Article I Sec. 21. That provision protects rights that existed at common law. In Florida, the common law was that noncompete agreements were not allowed. By imposing the arbitrary one-sided balancing and limiting the Court’s ability to balance hardships, the legislature has limited Defendants’ access to the courts.

The statute also likely violates the separation of powers clauses of the Florida Constitution, Article II Section 3 and Article V Section 1 by interfering with the Court’s powers in equity. By prohibiting the Court from considering all factors in equity, including undue hardship, the legislature has interfered with the Court’s powers.

In short, there are several constitutional problems with Florida's unbalanced and biased noncompete statute. Hopefully, the courts will recognize this imbalance and address the constitutional defects in the statute one of these days.

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I appreciate your comments and general questions but this isn't the place to ask confidential legal questions. If you need an employee-side employment lawyer, try http://exchange.nela.org/findalawyer to locate one in your state.