HCBA Lawyer Magazine Vol. 28, No. 3 | Page 47

Court interPrets “LegitiMate business interests” unDer non-CoMPete statute labor & Employment law Section Continued from page 44 violating noncompete agreements. The former employees were marketing representatives for the agencies. Both individuals left their employment to work for direct competitors. Both marketed and attempted to solicit from their previous employer’s referral sources while bound by restrictive covenants. It was undisputed that the former employees violated their noncompete agreements by working for competitors within the area covered by the agreement during the relevant periods. The issue, however, was whether home health referral sources can be a protected legitimate business interest under section 542.335. In Florida, the existence of a “legitimate business interest” is necessary to the enforceability of noncompete agreements. Section 542.335 defines “legitimate business interest” by providing an enumerated list of protectable interests, prefaced by the qualification that the list “includes, but is not limited to” those interests that are included in the express language. § 542.335(1)(b), Fla. Stat. “Referral sources” are not expressly included among the protected interests. The employees argued that because the statute specifically protects “substantial relationships with specific prospective or existing customers, patients or clients,” referral sources cannot be subject to protection, because to do so would be contrary to the plain language of the statute. The employees reasoned that to rule otherwise would be to protect “unidentified, prospective patients.” The Court disagreed. White, 226 So. 3d at 781-82. Once it determined that the statute does not preclude referral sources from being protectible interests, the Court then turned to the issue of whether referral sources are in fact protected legitimate business interests. Because the statute protects “a plethora of protected legitimate business interests far beyond those explicitly listed” in section 542.335, id. at 786, “courts must engage in fact- and industry-specific determinations when construing non-enumerated interests,” id. at 784. The Court explained that “[c]ertain industries, such as home health services, present special facts where protecting referral sources may be necessary to prevent unfair competition.” Id. at 786. The Court found that referral sources may be protectible interests in these cases. But whether an activity qualifies as such is “inherently a factual inquiry.” Ultimately, courts are to engage in a case-by-case analysis, with emphasis on the specific industry and facts at issue to determine whether a plaintiff has established a legitimate business interest. Each case will be determined by context and proof. Author: Erin G. Jackson - Johnson Jackson LLC JAN - FEB 2018 | HCBA LAWYER 45