FLORIDA NON-COMPETE LAW: FORMING RELATIONSHIPS WITH CUSTOMERS AS PART OF A SALES POSITION MAY BE A PROTECTED BUSINESS INTEREST

Many sales positions, irrespective of the industry, require employees to establish personal relationships with prospective or existing customers. Sales employees often meet and greet a business’ existing and potential customers, at the business’ expense to ensure current and future business success. These substantial relationships formed by employees may constitute a protected legitimate business interests as constrained by Section 542.335 of the Florida Statutes. Peter Mavrick is a Miami non-compete lawyer who has extensive experience in representing the interests of businesses and business owners.

In the case of Allied Universal Corporation v. Given, 223 So. 3d 1040 (Fla. 3d DCA 2017), Allied Universal Corporation (“Allied”) was a manufacturer and distributor of water treatment chemicals, which sold its products without the southeastern United States. Jeffrey Givens (“Given”) worked a regional sales manager for Allied. Given was responsible for all of Allied’s sales territory north of Florida. Given was trained in Allied’s business practices, confidential and proprietary processes and techniques, as well as proprietary business information on raw material providers, costs, customer lists, prospective customers, marketing and pricing. Given signed a non-disclosure and non-compete agreement with Allied in 2015.

One year later, Given resigned from Allied and went to work for Univar, a competitor. Univar hired Given to be a strategic account manager. Allied filed a lawsuit against Given and a motion for a preliminary injunction to enforce the terms of the non-compete agreement. In support of its motion, Allied presented evidence of a legitimate business interest in its substantial relationships with its customers, as well as its goodwill associated with the specific geographic location. Allied provided testimony that Given had substantial relationships with specific prospective or existing Allied customers. Given attended several trade meetings to cultivate these contacts.

Given contended Allied had suffered no harm because he had not yet begun managing a sales territory for Univar. Given further argued that he had not breached the non-compete, therefore no monetary damages were incurred by Allied. Given failed to present any evidence to rebut Allied’s claims. The trial court denied Allied motion for a preliminary injunction. Allied immediately appealed.

Courts shall construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement.” Fla. Stat. § 542.335(1)(h). Two of the statutorily protected legitimate business interests are (1) “[s]ubstantial relationships with specific prospective or existing customers” and (2) goodwill associated with an “ongoing business” or “specific geographic location.” Fla. Stat. § 542.335 (1)(b)(3)&(4). Allied Universal Corporation v. Given held that the trial court abused its discretion in denying Allied motion for preliminary injunction, because Allied presented unrebutted evidence of a “statutorily listed legitimate business interest to be protected and also presented unrebutted evidence of irreparable harm.”

The appellate court found that over the course of his six-year employment with Allied, Given received information on existing and prospective customers of Allied. Reliance v. Wholesale, Inc. v. Godfrey, 51 So. 3d 561, 565 (Fla. 3d DCA 2010) held that, “[a]s with many sales positions, regardless of industry, forming relationships with prospective and existing customers is invaluable and often vital to success.” The appellate court further found that Given admitted that if he were not enjoined, he would begin managing a sales territory for Univar. The appellate court held that the unrebutted evidence showed that Given had substantial relationships with specific and existing Allied customers and that his employment with Univar would cause irreparable harm to Allied.

Allied also provided unrebutted evidence that Allied’s business would be severely hurt if Given used Allied’s customer information, relationships, and marketing strategy in his new employment with Univar. The appellate court held that there is no adequate remedy at law for disclosure of this information. Allied Universal Corporation v. Given held that an employer seeking any injunction need not directly prove that the former employee’s actions will cause irreparable harm if not enjoined; the presumption of harm in this case was unrebutted. Therefore, the appellate court reversed the trial court’s order denying Allied’s motion for temporary injunction and remanded it to the trial court with directions to grant the motion and enter the requested injunction.

Peter Mavrick is a Miami non-compete attorney. This article does not serve as a substitute for legal advice tailored to a particular situation.