Businesses can use non-compete agreements to protect their substantial business relationships with prospective and current customers, patients, or clients. A common issue in business litigation seeking to enforce non-compete agreements is whether the business sufficiently demonstrates that it has substantial business relationships to protect. Such business relationships are typically based on the contractual agreements between the business and customer. However, a business can establish a “prospective” substantial relationship when the customers are specific and identifiable. 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.
To “enforce restrictive covenants under Florida law, a plaintiff must plead and prove the existence of one or more legitimate business interests justifying a restrictive covenant; generally, a legitimate business interest takes the form of confidential information, substantial customer relationships, or extraordinary training and education, and a restrictive covenant may be no broader than is necessary to protect the legitimate business interest at issue.” Lucky Cousins Trucking, Inc. v. QC Energy Resources Texas, LLC, 223 F. Supp. 3d 1221 (M.D. Fla. 2016). Under Florida law, “to have protectable interest in specific prospective or existing customer relationships, employer seeking to enforce restrictive covenant in employment agreement need not prove that its former employee himself had a substantial relationship with any particular customer; proper inquiry focuses on relationship between employer and its prospective and existing customers.” Milner Voice and Data, Inc. v. Tassy, 377 F. Supp. 2d 1209 (S.D. Fla. 2005).
A business’ customer relationships are protected as legitimate business interests under Section 542.335, Florida Statutes, because such relationships are often the lifeblood of a business. Indeed, “[a]s with many sales positions, regardless of the industry, forming relationships with prospective and existing customers is invaluable and often vital for success.” Allied Universal Corp. v. Given, 223 So. 3d 1040 (Fla. 3d DCA 2017). This is one example of why “the harm presumed under the statute includes the potential damages to [the plaintiff’s] longstanding relationships with its customers and the protection of confidential client information.” Variable Annuity Life Ins. Co. v. Hausinger, 927 So. 2d 243 (Fla. 2d DCA 2006).