FLORIDA NON-COMPETE AGREEMENTS: ACTIONS TAKEN IN RELATION TO AN OFFER OF EMPLOYMENT MAY BE CONSIDERED SOLICITATION

Florida employers often require employees to sign non-solicitation agreements to protect their business from having its employees poached. Non-solicitation agreements often fail to define the term “solicit.” Solicitation is defined in Black’s Law Dictionary (11th ed. 2019), as “[t]he act or an instance of requesting or seeking to obtain something; a request or petition.” Cases involving disputes over what constitutes solicitation often require examination of who initiated the contact. Peter Mavrick is a business litigation attorney who has extensive experience with non-compete agreements.

In the case of Convergent Techs., Inc. v. Stone, 257 So. 3d 161 (Fla. 1st DCA 2018) Convergent Technologies, Inc. (“CTI”), provided cyber-security training both as a prime contractor and subcontractor with the United States government. CTI entered into a subcontract with Telecommunications Systems, Inc. (“TCS”), to provide instructors for a Joint Cyber Analysis Course (“JCAC”), a beginner’s level cyber-security program for Navy personnel. CTI hired instructors for the JCAC job. Each instructor signed an employment contract with CTI that contained a non-solicitation clause. CTI’s non-solicitation clause stated, in pertinent part, that, “…I will not solicit employment with any other company associated with the JCAC contract during the customer review period, full-time employment period, or a six month post employment [sic] period.”

Under the terms of the contract between TCS and CTI, the companies agreed they would not solicit or hire each other’s employees who provided services under the JCAC contract. However, TCS also hired Epsilon, Inc. (“Epsilon”), another subcontractor for the JCAC contract. There was no non-solicitation agreement between CTI and Epsilon, or between it and any of the other subcontractors on the JCAC job.

Paul Hutchinson (“Hutchinson”), a CTI instructor told his friend Christopher Gaukel (“Gaukel”), an Epsilon lead instructor, that he had concerns about his employment with CTI regarding pay rates, health insurance, training courses, and the “complete lack of response and communication from CTI senior management and its owner….” Gaukel encouraged Hutchinson to contact to Keith Pabst, TCS’s project manager on the JCAC project. Gaukel also informed Peter Penzell (“Penzell”), Epsilon’s Chief Executive Officer, about some of the issues employees with CTI were having with CTI’s management, based on his conversations with Hutchison. Gaukel told Hutchinson that Penzell might contact him about a potential employment opportunity with Epsilon. Hutchinson told Gaukel he would be “interested in taking the call.”

Penzell heard more about the dissatisfaction of Hutchinson and three other CTI instructors (collectively “employees-appellees”). Rather than lose four qualified instructors from the JCAC project, Penzell contacted his recruiter, Michael Kane, and assigned him the task of contacting Hutchinson and proposing that he come to work for Epsilon. Penzell also asked Gaukel to reach out to the other three instructors for their contact information in order that he could speak to them directly about employment with Epsilon. Penzell contacted these employees-appellees and conveyed an offer of employment with Epsilon on the JCAC project.

CTI filed a lawsuit against the four employees-appellees to have the non-solicitation agreements enforced and treated as non-compete agreements. CTI also sued to enjoin employees-appellees from working for Epsilon or any other company associated with the federal government contract, and to recover damages for breach of contract. Employees-appellees filed a motion for summary judgment. The trial court granted employees-appellees’ motion and ruled that the evidence presented in the record clearly shows that Epsilon solicited these employees-appellees, and not the converse. Employees-appellees eventually accepted employment offers from Epsilon. The trial court held that because employees-appellees did not engage in any proactive solicitation, they did not violate or breach their non-solicitation agreements. CTI appealed and the appellate court reversed and remanded the decision.

The appellate court held that the trial court improperly rejected the precedence of Scarbrough v. Liberty National Life Insurance Co., 872 So.2d 283 (Fla. 1st DCA 2004), which held that “[i]t reasonably appears [ ] that a person may, in appropriate circumstances, solicit another’s business regardless of who initiates the meeting” because “the term ‘solicit’ in an agreement prohibit[s] the employee from being ‘proactive’ in such efforts.” Scarbrough v. Liberty National Life Insurance Co., 872 So.2d at 285. Scarbrough expanded the concept of direct solicitation to encompass less direct conduct.

The appellate court concluded that “whether a defendant’s behavior is proactive presents a question of fact for the trier of fact.” It was error to resolve the question of whether employees-appellees were proactive in soliciting employment with Epsilon on a motion for summary judgment. A summary judgment proceeding “is not a trial by affidavit or deposition.” The movant must demonstrate conclusively that no genuine issue exists as to any material fact, and the court must draw every possible inference in favor of the party opposing summary judgment.

The appellate court found that from Hutchinson’s deposition testimony and Gaukel’s affidavit, a reasonable inference could have been drawn that Hutchinson, along with the other employees-appellees, might have been complaining just a little too loudly about employment woes with CTI in a working environment where Epsilon could hear their protests. Hutchinson’s actions to round-up the other three employees-appellees also was subject to a reasonable inference that there might have been a concerted plan to leave CTI for Epsilon. The question of whether the terms of the non-solicitation agreements were violated was predicated on the inferences drawn from the facts of employees-appellees’ behavior prior to, and during, their negotiations with Epsilon. The appellate court reversed the lower court’s decision and remanded the case for further proceedings.

Peter Mavrick practices non-compete litigation in Broward, Miami-Dade, and Palm Beach Counties, Florida. This article does not serve as a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale,