Source: https://www.floridabar.org/the-florida-bar-journal/floridas-noncompete-statute-reasonable-or-truly-obnoxious/
Timestamp: 2019-02-16 09:59:46
Document Index: 59878910

Matched Legal Cases: ['§542', '§542', '§534', '§534', '§542', '§542', '§542', '§542', '§542', '§542', '§542', '§671', '§688', '§543', '§2']

Florida’s Noncompete Statute: “Reasonable” or “Truly Obnoxious?” – The Florida Bar
Vol. 92, No. 3 March 2018 Pg 10 Hank Jackson Featured Article
In Hiles v. American Home Therapy, Inc. 183 So. 3d 449, 454 (Fla. 5th DCA 2015), it had been held that referral sources were not specifically “customers, patients, or clients” and, therefore, were necessarily not protectable interests. To the contrary, in the Fourth DCA case — Mederi Caretenders Visiting Services of Southeast Florida, LLC v. White, 179 So. 3d 564, 564 (Fla. 4th DCA 2015) — it was ruled that such referral sources were protectable legitimate business interests. In the consolidated appellate review, the Florida Supreme Court in White reasoned that the language “includes, but is not limited to” shows that the list of protectable interests was not an exhaustive list, and there was “clearly no exclusion in the statute for referral sources.”52 It further held that “referral sources may be a protected legitimate business interest within the meaning of F.S. §542.335, depending upon the context and proof adduced” (the context and proof adduced to be determined by the trial court).53 Importantly, the court in White also acknowledged that it could not resolve all the factual questions and instructed that the cases be remanded all the way back to the trial courts.54 S o the precise issue ruled upon by the court was a fairly narrow one — the plain meaning of the statutory language “including, but not limited to,” an issue that was properly before the court and needed to be resolved, but arguably not requiring a 25-page decision.
Additionally, the court, while trying to harmonize the noncompete statute regarding protectable interests with its earlier analysis of restraints of trade, quoted, in a parenthetical, language in Capelouto v. Orkin Extermination Co. of Fla. Inc. , 183 So. 2d 532, 534 (Fla. 1966), indicating that noncompete agreements should be enforced in such a manner as to “protect the legitimate interests of the employer without doing harm to the public interest, and without inflicting an unduly harsh or oppressive result on the employee. ”59 This inclusion of the impact on the employee seems contrary to a strict prohibition against consideration of the employee’s hardship.
• Rules of Contract Construction — The White decision made a more direct reference to the provision in the noncompete statute that “a court shall not employ any rule of contract construction that requires the court to construe a restrictive covenant narrowly, against the restraint.” This is the same provision that New York and other courts have found to be so slanted toward the employer and against the employee as to violate public policy. The court in White briefly mentioned the criticized provision and then tried to minimize its actual impact. It acknowledged the provision “restricts courts from applying certain rules of contract construction,”60 but then immediately balanced that in the very same sentence by emphasizing the statute also grants “the trial courts’ fairly wide discretion to fashion the appropriate context-dependent remedy.”61 A gain, the court relied on the reasonableness standard within the statute and the need to apply that standard to the specific facts in each case to counter assertions that the statute was too restrictive. Indeed, the court in White held that the two cases consolidated before it for appellate review should be remanded all the way back to the trial courts to resolve issues of fact.
1 Fla. Stat. §542.335(1)(c) (2016).
2 White, 2017 WL 405393 at *8-9.
5 Id. at *8-9.
6 Brown & Brown, Inc. v. Johnson, 34 N.E.3d 357, 361 (2015).
7 Id. at 360 (quoting Conney v. Osgood Mach. , 612 N.E.2d 277, 284 (1993)).
8 White, 2017 WL 405393 at *3.
11 Hilb Rogal & Hobbs of Florid, Inc. v. Gimmel, 48 So. 3d 957, 960- 62 (Fla. 4th DCA 2010 ); Environmental Services, Inc. v. Carter, 9 So. 3d 1258, 1262 (Fla. 3d DCA 2009).
12 Love v. Miami Laundry Co. , 160 So. 2d 32, 34 (Fla. 1934).
13 In 1953, Fla. Stat. §534.12 was enacted then eventually replaced by Fla. Stat. §534.33. In 1996, the current noncompete statute was enacted.
14 White, 2017 WL 405393 at *10, n.1.
15 Fla. Stat. §542.335(3) (2016).
16 Fla. Stat. §542.335(1) (2016).
17 Fla. Stat. §542.335(1)(b) (2016).
18 Fla. Stat. §542.335(1)(b)(1-5) (2016).
19 Fla. Stat. §542.335(1)(c) (2016).
20 Fla. Stat. §542.335(1)(g)(1) (2016).
21 Fla. Stat. §542.335(1)(h) (2016).
22 As examples, Florida has adopted the Uniform Commercial Code ( Fla. Stat. §671.101, et seq. ) and Uniform Trade Secrets Act ( Fla. Stat. §688.001, et seq. ).
23 Edwards v. Arthur Anderson LLP, 189 P.3d 285 (2008) (the California Supreme Court confirmed its long standing public policy that employee noncompete agreements are not enforceable).
24 N orman D. Bishara, Fifty Ways to Leave Your Employer: Relative Enforcement of Covenants Not to Compete, Trends, and Implications for Employee Mobility Policy, 13 U. Pa. J. Bus. L. 751, 785 (Spring 2011).
25 Brown & Brown, 34 N.E.3d at 360.
29 Id. at 360.
30 Id. (quoting Conney v. Osgood Mach., 612 N.E.2d 277, 284 (1993)).
32 Id. at 361.
38 Transunion, 625 Fed. App’x at 404.
40 Id. at 407.
42 U.S. Ct. of App. 11th Cir. R. 36-2.
43 Lucky Cousins Trucking, 223 F. Supp. 3d at 1224.
44 In Florida Digestive Health Specialists, LLP v. Romon E. Colina, M.D. LLC, 192 So. 3d 491 (Fla. 2d DCA 2015), Florida’s Second District Court of Appeal held that whether the employee — against whom an injunction was sought — would suffer greater harm from the imposition of the injunction is not to be considered because the noncompete statute in §543.335(1)(g) explicitly prohibits such consideration. In making this ruling, the Second DCA relied upon and was supported by an earlier opinion by the First DCA in Depuy Orthopaedics, Inc. v. Waxman, 95 So. 3d 928 (Fla. 1st DCA 2012).
45 Unisource Worldwide, 199 F. Supp. 2d at 1201.
46 Id. at 1202.
47 Brown and Brown, Inc. v. Mudron, 887 N.E.2d at 440 (2008).
49 Carson, 734 S.E.2d at 483.
50 White, 2017 WL 405393 at *1.
52 Id. at *5.
53 Id. at *9.
57 Id. at *8.
58 Id. (citing Fla. Const. art. I, §2).
59 Id. at *8 (emphasis added).
60 Id. at *9.