How Are Ambiguities In Non-Compete Agreements Resolved Under Florida Law?

A party opposing enforcement of a non-compete agreement may argue that a provision contained in the agreement is ambiguous and subject to multiple interpretations. The United States District Court for the Middle District of Florida recently addressed whether a provision in a non-compete agreement was ambiguous in Partylite Gifs, Inc., v. MacMillan, C.A. No. 8:10-CV-149-T-27EAJ (M.D. Fla. Sept. 10, 2012). In Partylite, the court had to consider competing summary judgment motions concerning a former Partylite consultant's alleged breach of a non-compete, non-solicitation and non-disclosure agreement. Id. at *1.

The parties in Partylite disagreed, among other things, regarding the scope of the consultant agreement. In interpreting the agreement, the court first had to consider whether the language contained in the agreement was ambiguous. Id. at *10. Under Florida law, contract terms are considered ambiguous where its terms "are inconsistent on their face or where the phraseology can support reasonable difference of opinion as to the meaning of the words employed." Id. at 11, citing Smith v. Shelton, 970 So.2d 450, 451 (Fla. 4th DCA 2007). "However, a true ambiguity does not exist merely because a document can possibly be interpreted in more than one manner." Partylite at *11, citing Lambert v. Berkley S. Condo Ass'n, 680 So.2d 588, 590 (Fla. 4th DCA 1996).

In Partylite, the court denied the motions for summary judgment, in part, because there were sufficient ambiguities in the consulting agreement to raise questions of fact as to whether the agreement incorporated all of Partylite's policies and procedures. Id. at *11, citing Smith v. Shelton, 970 So.2d at 451 (holding that "[w]here the wording of an agreement is ambiguous, its interpretation involves questions of fact, precluding summary disposition.").

The Second District also addressed how courts resolve ambiguities in non-compete agreements in Emergency Assoc. of Tampa, P.A., et al., v. Sassano, 664 So.2d 1000 (Fla. 2d DCA 1995). In Sassano, a trial court entered a permanent injunction enjoining a doctor from competing against his former practice. On appeal, the Second District reversed holding that the trial court erred in finding that the geographical limitation in the non-compete agreement was ambiguous as a matter of law. Id. at 1001. The non-compete agreement at issue in Sassano restrained the doctor who sold his practice from practicing general medicine "anywhere within five (5)...