Introduction
Non-compete agreements may be enforced against third parties who never signed or agreed to a covenant not to compete. Leighton v. First Universal Lending, LLC, 925 So. 2d 462, 465 (Fla. 4th DCA 2006). However before a court can enjoin a third party under a non-compete agreement, the third party must receive notice and have an opportunity to be heard. Id., citing Sheoah Highlands, Inc. v. Daugherty, 837 So.2d 579, 583 (Fla. 5th DCA 2003).
In Leighton, an employer/lending company sought an injunction enforcing a non-compete agreement against its former employee and a competing company the employee went to work for. Id. at 463. The trial court held an evidentiary hearing on the injunctive relief and enjoined the employee and the competitor from competing with the employer within a fifty mile radius. Id. at 464. On appeal, the competitor argued the trial court committed reversible error by enjoining the competitor when it was neither named as a party to the action, nor served with the claim for injunctive relief. Id.
The Fourth District agreed with the competitor and reversed the injunction to the extent it applied to the competitor. Id. at 465. In Leighton, the employee, not the competitor, was a party to the non-compete agreement. Whether the competitor was a party to the non-compete agreement was not determinative however. As the Fourth District recognized, “[t]here is no doubt that a court can enjoin others who were not parties to the non-compete agreement.” Id. Before a party can be enjoined, however, it “must receive notice and have an opportunity to be heard.” Id.
Writing Required
Florida Statute section 542.335(1)(a) prohibits a court from enforcing a non-compete agreement “unless it is set forth in a writing signed by the person against whom enforcement is sought.” On its face, the statute suggests that a third party cannot be enjoined unless it signed the non-compete agreement. Courts interpreting this section, however, have found that notwithstanding section 542.335(1)(a), a court may enjoin a third party who aids and abets the violation of a non-compete agreement. Bauer v. Dilib, Inc., 16 So.3d 318, 320-21 (Fla. 4th DCA 2009)(citing a string of decisions holding that a court can enjoin third parties under a non-compete agreement provided the third parties receive notice and have an opportunity to be heard). The power of a court to enjoin a third party does not derive from section 542.335. Id. at 321. Instead, such authority derives from the common law. Id., citing W. Shore Rest. Corp. v. Turk, 101 So.2d 123, 129 (Fla. 1958)(holding that “the rule that a stranger to a convent may be enjoined from aiding and assisting the covenanter in violating his covenant is supported by an overwhelming weight of authority.”)(Further citations omitted).