FLORIDA NON-COMPETE LAW: LEGITIMATE BUSINESS INTERESTS CAN BE ESTABLISHED BY CLIENT GOODWILL ASSOCIATED WITH A SPECIFIC GEOGRAPHIC LOCATION

A temporary injunction is an available remedy when a party establishes that it has a valid, enforceable non-compete agreement that was violated. Fla. Stat. § 542.335(1)(j). Subsections 542.335(1)(b) and (c) of the Florida Statutes, set the standard for enforcing non-compete agreements and require the party seeking enforcement to plead and prove: (1) the existence of “one or more legitimate business interests” justifying the non-compete agreement and (2) the contractually specified restraint is reasonably necessary to protect the legitimate business interests. Peter Mavrick is a Miami non-compete lawyer who has extensive experience with non-competition covenant litigation and claims for injunctive relief.

In Ansaarie v. First Coast Cardiovascular Institute, P.A., 252 So.3d 287 (Fla. 1st DCA 2018), First Coast Cardiovascular Institute, P.A. (FCCI), was a professional medical practice that provided medical care in the fields of cardiovascular medicine and sleep disorders. FCCI operated medical offices in several Florida counties, including Putnam County. FCCI expended substantial resources to develop a cardiology practice in Putnam County, which included marketing, hiring physicians and support staff, and constructing a large catheterization laboratory within walking distance of the local hospital, Putnam County Medical Center (PCMC). FCCI contracted with PCMC to provide 24/7 “STEMI” services (“ST-elevation myocardial infarction,” i.e. serious heart attack patients) at the hospital. FCCI expended significant resources annually in order to meet its contractual requirement with PCMC.

FCCI recruited Dr. Imraan Ansaarie (“Dr. Ansaarie”), a cardiovascular surgeon from out-of-state. Dr. Ansaarie entered into a Physicians Employment Agreement (the “Non-Compete Agreement”) with FCCI, wherein he agreed to be restricted from providing competing cardiovascular services within a five-mile radius of FCCI’s practice for two years after termination of his employment with FCCI. The Non-Compete Agreement also prohibited Dr. Ansaarie from soliciting (defined to mean “initiate contact, or knowingly receive contact, or to in any manner cause or encourage contact”) an FCCI patient, referral source, or vendor for competing cardiovascular services within the restricted geographic area and time period.

FCCI marketed Dr. Ansaarie in Putnam County, provided him access to FCCI’s patients and referral sources, and arranged for Dr. Ansaarie to become the medical director of the PCMC Catheterization Laboratory. While still employed with FCCI, Dr. Ansaarie filed articles of incorporation with the Florida Department of State to create his own independent medical practice in Putnam County. Several months later, FCCI gave Dr. Ansaarie notice that his employment was terminated. After termination, Dr. Ansaarie continued to treat patients at PCMC (within the five-mile radius). He also continued to serve as director of the PCMC Catheterization Laboratory.

FCCI filed suit and a motion for temporary injunction to restrain Dr. Ansaarie from breaching the Non-Compete Agreement. FCCI introduced evidence that its referral sources had declined since Dr. Ansaarie’s departure and that many existing patients requested to have their files transferred to Dr. Ansaarie’s practice. The trial court granted the motion for temporary injunction. The temporary injunction order prohibited Dr. Ansaarie from, among other things, providing cardiovascular services within the prohibited five-mile radius, including treating patients at PCMC; soliciting FCCI’s patients, and soliciting FCCI’s referral sources or PCMC. Dr. Ansaarie immediately appealed.

Dr. Ansaarie made two arguments on appeal. First, he argued that the trial court erred in interpreting that physician referral sources can constitute a legitimate business interest. Florida Statutes define a “legitimate business interest” to include, but is not limited to, substantial relationships with “specific prospective or existing customers, patients or clients.” Fla. Stat. § 542.335(1)(b)(3). Dr. Ansaarie argued that FCCI failed to prove that the relationships in question were with particular, identifiable individuals. See University of Florida, Board of Trustees v. Sanal, 837 So.2d 512 (Fla. 1st DCA 2003). FCCI did not offer any evidence of “specific” prospective patients, but it did provide proof that it lost existing patients.

The appellate court rejected Dr. Ansaarie’s argument in light of the Florida Supreme Court’s opinion in White v. Mederi Caretenders Visiting Servs. of Se. Fla., LLC, 226 So.3d 774 (Fla. 2017), which concluded that home health services referral sources may be a protected legitimate business interest. A “legitimate business interest” also includes “customer, patient, or client goodwill” associated with “a specific geographic location” or “a specific marketing or trade area.” Fla. Stat. § 542.335(1)(b)(4). FCCI provided evidence of its efforts to cultivate a cardiac practice in Putnam County prior to hiring Dr. Ansaarie as well as evidence that several of its patients had recently requested to transfer their files to Dr. Ansaarie. The trial court found that FCCI demonstrated a legitimate business interest in its substantial relationships with its existing patients. The appellate court held that this finding was supported by competent, substantial evidence and was therefore, sufficient to constitute a legitimate business interest.

Dr. Ansaarie’s second argument was that FCCI’s relationship with PCMC was not a legitimate business interest. The appellate court declined to address that argument because FCCI had already proved the legitimate business interests necessary to justify the injunction’s restrictions relating to existing patients, investment in Putnam County, and referral sources. The appellate court affirmed the trial court’s determination that FCCI met its requirement under by pleading and proving legitimate business interests.

The appellate court concluded that the trial court’s findings were properly made, and that the temporary injunction was properly entered. The temporary injunction was affirmed.

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