Court interPrets “LegitiMate business interests” unDer non-CoMPete statute
labor & Employment law Section
Continued from page 44
violating noncompete agreements.
The former employees were
marketing representatives for the
agencies. Both individuals left their
employment to work for direct
competitors. Both marketed and
attempted to solicit from their
previous employer’s referral sources
while bound by restrictive
covenants. It was undisputed that
the former employees violated
their noncompete agreements by
working for competitors within the
area covered by the agreement
during the relevant periods. The
issue, however, was whether home
health referral sources can be a
protected legitimate business
interest under section 542.335.
In Florida, the existence of
a “legitimate business interest”
is necessary to the enforceability
of noncompete agreements.
Section 542.335 defines
“legitimate business interest”
by providing an enumerated list
of protectable interests, prefaced
by the qualification that the list
“includes, but is not limited
to” those interests that are
included in the express language.
§ 542.335(1)(b), Fla. Stat. “Referral
sources” are not expressly included
among the protected interests.
The employees argued that
because the statute specifically
protects “substantial relationships
with specific prospective or
existing customers, patients or
clients,” referral sources cannot be
subject to protection, because to
do so would be contrary to the
plain language of the statute.
The employees reasoned that
to rule otherwise would be to
protect “unidentified, prospective
patients.” The Court disagreed.
White, 226 So. 3d at 781-82.
Once it determined that the
statute does not preclude referral
sources from being protectible
interests, the Court then turned
to the issue of whether referral
sources are in fact protected
legitimate business interests.
Because the statute protects “a
plethora of protected legitimate
business interests far beyond
those explicitly listed” in section
542.335, id. at 786, “courts must
engage in fact- and industry-specific
determinations when construing
non-enumerated interests,” id. at
784. The Court explained that
“[c]ertain industries, such as home
health services, present special
facts where protecting referral
sources may be necessary to prevent
unfair competition.” Id. at 786.
The Court found that referral
sources may be protectible interests
in these cases. But whether an
activity qualifies as such is
“inherently a factual inquiry.”
Ultimately, courts are to engage
in a case-by-case analysis, with
emphasis on the specific industry
and facts at issue to determine
whether a plaintiff has established
a legitimate business interest.
Each case will
be determined
by context
and proof.
Author:
Erin G. Jackson -
Johnson Jackson
LLC
JAN - FEB 2018
|
HCBA LAWYER
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