FORT LAUDERDALE BUSINESS LITIGATION: FLORIDA LAW PROTECTS A COMPANY’S SPECIALIZED TRAINING AS A LEGITIMATE BUSINESS INTEREST

A frequent issue in business litigation is whether restrictive covenants in an employment contract are enforceable. “Florida statutory law (as a matter of public policy) does not allow a party to enforce a restrictive covenant unless it proves that enforcement is necessary to protect its legitimate business interests.” Evans v. Generic Sol. Eng’g, LLC, 178 So. 3d 114 (Fla. 5th DCA 2015). Generally, a “legitimate business interest must represent an investment by the employer and must enable unfair competition if misappropriated.” IDMWORKS, LLC v. Pophaly, 192 F. Supp. 3d 1335 (S.D. Fla. 2016). Florida’s non-compete statute, Section 542.335, includes a non-exhaustive list of examples of legitimate business interests, one of which is a party’s “extraordinary or specialized training.” Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, 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.

Under Florida law, “a ‘legitimate business interest’ is an identifiable business asset that constitutes or represents an investment by the proponent of the restriction such that, if that asset were misappropriated by a competitor (i.e., taken without compensation), its use in competition against its former owner would be “unfair competition.” White v. Mederi Caretenders Visiting Servs. Of Se. Fla, LLC, 226 So. 3d 774 (Fla. 2017). Indeed, the Supreme Court of Florida has held that a “legitimate business interest is a business asset that, if misappropriated, would give its new owner an unfair competitive advantage over its former owner.” White v. Mederi Caretenders Visiting Servs. Of Se. Fla, LLC, 226 So. 3d 774 (Fla. 2017). An employer can enforce a non-compete agreement if “there [are] special facts present over and above ordinary competition such that, absent a non-competition agreement, ‘the employee would gain an unfair advantage in future competition with the employer.’” Passalacqua v. Naviant, Inc., 844 So.2d 792 (Fla. 4th DCA 2003).

Training an employee constitutes a legitimate business interest protectable by Florida law when the training rises to the level of being specialized or extraordinary. Training is classified as extraordinary when it exceeds ‘what is usual, regular, common, or customary in the industry in which the employee is employed.’” Dyer v. Pioneer Concepts Inc., 667 So. 2d 961 (Fla. 2d DCA 1996). The special training must go above and beyond “what would be common or typical in the industry.” Autonation Inc. v. O’Brien, 347 F. Supp. 2d 1299 (S.D. Fla. 2004). A business’ optional training will “not constitute a legitimate business interest sufficient to justify injunctive relief.” Austin v. Mid State Fire Equip. of Cent. Florida, Inc., 727 So. 2d 1097 (Fla. 5th DCA 1999). As such, Florida courts have found no legitimate business interest where an employee “was not required to attend the various training seminars and only ‘popped in and out’ of the meetings.” Autonation Inc. v. O’Brien, 347 F. Supp. 2d 1299 (S.D. Fla. 2004).

A Florida court will not consider a business’ training materials as extraordinary or specialized if other companies in the same industry have access to the same materials. For example, in IDMWORKS, LLC v. Pophaly, the United States District Court for the Southern District of Florida held that a company’s alleged training was not a legitimate business interest under Section 542.335 because the training to did go “beyond industry norms.” Instead, Pophaly found that the training received by the defendant “was not different from training he would expect to receive at other companies in the industry.” IDMWORKS, LLC v. Pophaly, 192 F. Supp. 1335 (S.D. Fla. 2016). Pophaly further found that the alleged training “database” and materials were accessible by many other companies.

By contrast, in Aero Kool Corporation v. Oosthuizen, Florida’s Third District Court of Appeals held that the employer had “a legitimate business interest in the extensive, specialized training in aircraft component repair that it provided” to its employee. 736 So. 3d 25 (Fla. 3d DCA 1999). Aeuro Kool expressly held that the factual record clearly established the subject training was specialized and extraordinary. For example, the plaintiff demonstrated that it provided its employee “with over 195 hours of specialized training, enabling him to become skilled in repairing and overhauling aircraft components, particularly hear exchangers.” Aero Kool Corporation v. Oosthuizen, 736 So. 3d 25 (Fla. 3d DCA 1999). Such an example is precisely the type of specialize training that Section 542.335 was designed to protect as a legitimate business interest.

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