MIAMI BUSINESS LITIGATION: ENFORCING NON-SOLICITATION AGREEMENTS IN FLORIDA

In business litigation, courts will enforce non-solicitation agreements against a business’ former employee to protect the business’ substantial customer relationships. Section 542.335, Florida Statutes governs the enforceability of customer non-solicitation agreements. Like other restrictive covenants in Florida, the non-solicitation clause must be: (1) reasonable in time, area, and line of business, (2) supported by a legitimate business interest, and (3) reasonably necessary to protect such interest. A business can utilize a non-solicitation clause to protect its legitimate business interests in its substantial relationships with existing or prospective customers. Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The right to prohibit the direct solicitation of existing customers is a legitimate business interest protected under Florida law. Atomic Tattoos, LLC v. Morgan, 45 So. 3d 63 (Fla. 2d DCA 2010). Indeed, non-solicitation provisions in employment contracts are sometimes necessary to protect an employer’s substantial relationships with its current and prospective customers. Milner Voice and Data, Inc. v. Tassy, 377 F. Supp. 2d 1209 (S.D. Fla. 2005). Florida courts routinely enforce non-solicitation agreements to preclude former employees from soliciting a business’ customers and disclosing the former employer’s confidential materials, such as pricing information. Austin v. Mid State Fire Equipment of Cent. Fla., Inc., 727 So. 2d 1097 (Fla. 5th DCA 1999).

The restrictive covenants must also be reasonable in time, area, and line of business. Hilb Rogal & Hobbs of Fla., Inc. v. Grimmel, 48 So. 3d 957 (Fla. 4th DCA 2010). Florida courts presume that covenants containing time restrictions of five years or less are reasonable. Section 542.335(e), Florida Statutes. Florida courts will uphold a non-solicitation agreement that does not specify a geographic restriction where the remainder of the agreement’s restrictions are otherwise narrow. Envtl. Servs., Inc. v. Carter, 9 So. 3d 1258 (Fla. 5th DCA 2009).

“There is little question under Florida law that an employer has a legitimate business interest in prohibiting solicitation of its customers with whom the employee has a substantial relationship.” N. Am. Prods. Corp. v. Moore, 196 F. Supp. 2d 1217 (M.D. Fla. 2002). A “covenant not to compete which includes a non-solicitation clause is breached when a former employee directly solicits customers of his former employer.” Dyer v. Pioneer Concepts, Inc., 667 So. 2d 961 (Fla. 2d DCA 1996). For example, in Atomic Tattoos, LLC v. Morgan, Florida’s Second District Court of Appeal found that the right to prohibit solicitation of existing customers by an employee is a legitimate business interest. 45 So. 3d 63 (Fla. 2d DCA 2010). In turn, Atomic Tattoos enjoined former employees who solicited tattoo customers of their former employer.

As another example, in Environmental Services, Inc. v. Carter, Florida’s Fifth District Court of Appeal held that a former employee violated his non-solicitation agreement because he “actively enticed customers away from” the former employer. 9 So. 3d 1258 (Fla. 5th DCA 2009). Carter further noted that: “regardless of who initiated the contact, the [non-solicitation] agreements clearly prevent the former employees from ‘[performing] services for any current, former or prospective customers with whom employer [sic] had any business-related contact (contact intended to advance the Company’s business interests) during his/her employment with the Company.’” Envtl. Servs., Inc. v. Carter, 9 So. 3d 1258 (Fla. 5th DCA 2009). Carter therefore enforced the non-solicitation against the employee because the improper contacts occurred with customers who still maintained active relationships with Environmental Services, Inc. (the former employer).

Employers may also be entitled to temporary injunctions against former employees to enforce non-solicitation agreements. This type of injunctive relief is available if the non-solicitation provision is a valid and enforceable agreement, and the employer does not have an adequate remedy at law to prevent former employees from contacting its customers. In Picture It Sold Photography, LLC v. Bunkelman, Florida’s Fourth District Court of Appeal held that a non-solicitation was enforceable against an employee even though “some customers testified that they would not retain [the employer’s] services again.” 287 So. 3d 699 (Fla. 4th DCA 2020). Bunkelman ultimately issued an injunction because the former employee contractor admitted he solicited some customers who still retained his former employer for services.

However, a non-solicitation agreement generally is not enforceable, and the protection of former customers as a legitimate business interest will be unavailable, where there are no identifiable agreements in place with customers for present or future work. Evans v. Generic Solution Engineering, LLC, 178 So. 3d 114 (Fla. 5th DCA 2015). As such, Florida courts may deny injunctive relief and refuse to enforce non-solicitation agreements where the employer does not have exclusive relationships with any of its customers or where the customers were “readily identifiable” by publicly available means. Evans v. Generic Sol. Eng’g, LLC, 178 So. 3d 114 (Fla. 5th DCA 2015). Thus, a “substantial relationship is more likely to exist where there is active, on-going business being conducted; exclusivity; a customer who cannot be easily identified by other competitors in the industry; and an expectation of continued business. IDMWORKS, LLC v. Pophaly, 192 F. Supp. 3d 1335 (S.D. Fla. 2016).

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.