MIAMI BUSINESS LITIGATION: ENFORCING NON-COMPETE AGREEMENT BASED ON “EXTRAORDINARY OR SPECIALIZED TRAINING”

Florida law specifies, at Florida Statutes section 542.335, how and when a restrictive covenant (such as a non-compete agreement or non-solicitation agreement) may be enforced against a current or former employee. In a lawsuit to enforce an agreement that restricts or prohibits competition during or after the term of the restrictive covenants, section 542.335(1)(b) states that “[t]he person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant.” Proving a “legitimate business interest” is crucial in a non-compete case because the statute states that “[a]ny restrictive covenant non supported by a legitimate business interest is unlawful and is void and unenforceable.” Under the statute, the term “legitimate business interest” includes “extraordinary or specialized training.” Many businesses have tried to enforce non-compete agreements based on “extraordinary or specialized training,” when in injunction proceedings Florida courts have determined the training to be insufficient. In such cases, courts have allowed the former employee to compete against the former employer on the grounds that this constitutes ordinary competition, not unfair competition. Peter Mavrick a Miami business litigation attorney, and represents clients 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.

Important precedent from the Supreme Court of Florida in White v. Mederi Caretenders of Southeast Florida, LLC, 226 So.3d 774 (Fla. 2017), explained that Florida’s non-compete statute is designed to prevent only unfair competition, not all competition. The White decision explained that, “[f]or an employer to be entitled to protection [against competition], ‘there must be 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.” Florida’s Second District Court of Appeal in Hapney v. Cent. Garage, Inc., 579 So.2d 127 (Fla. 2d DCA 1991), described “extraordinary training” in pertinent part: “that which goes beyond what is usual, regular, common, or customary in the industry in which the employee is employed. The rationale is that if an employer dedicates time and money to the extraordinary training and education of an employee, whereby the employee attains a unique skill or an enhanced degree of sophistication in an existing skill, then it is unfair to permit that employee to use those skills to the benefit of a competitor when the employee has contracted not to do so. The precise degree of training or education which rises to the level of a protectible interest will vary from industry to industry and is a factual determination to be made by the trial court. Needless to say, skills which may be acquired by following the directions in the box or learned by a person of ordinary education by reading a manual do not meet the test.” Based on this definition, the appellate court in Hapney concluded that Hapney did not receive extraordinary training because the training provided to him merely “extended his airconditioning installation and repair skills to include cruise control units and cellular telephones.”

In a later appellate decision, Dyer v. Pioneer Concepts, Inc., 667 So.2d 961 (Fla. 2d DCA 1996), held that an employer did not have a protectible interest due to “specialized training” where the evidence showed the employee, Dyer, received training in stripping floors and the use of equipment leased to grocery stores. The employer also trained Dyer via attendance of seminars on development of interpersonal skills, hiring and firing techniques, and repairing equipment. The appellate court in Dyer concluded that this type of training was insufficient under Florida Statutes section 542.335 to qualify as a “legitimate business interest.”

More recently, in Vessels v. Dr. Terrazzo of Florida, LLC, 352 So.3d 946 (Fla. 5th DCA 2022), Florida’s Fifth District Court of Appeal reversed a preliminary injunction against a former employee. The employee had left his employment to start a competing business providing terrazzo restoration. Vessels held that the statutory term “extraordinary or specialized training” does not include the employer’s successful efforts in teaching the employee “the basics of terrazzo restoration” through “on-the-job training that was ‘usual, regular, common, or customary in the industry.'”

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.