Fort Lauderdale, Non-Solicitation Agreement Attorney – 954-332-2380
If a contract contains a non-compete agreement, it likely contains a non-solicitation agreement. These types of restrictive covenants are routinely found in both the employment and sale of a business contexts. A non-solicitation provision generally operates to bar a former employee or the seller of a business from soliciting clients, customers or patients. In some instances, non-solicitation agreements are used to bar solicitation of a company’s remaining employees or its other key relationships. Florida courts routinely enforce non-solicitation provisions by issuing preliminary injunctions that prohibit the defendant from having any communication with the relevant class of individuals (e.g. customers).
Non-Solicitation Agreements – Customer Relationships
The most common use of a non-solicitation agreement is to prevent solicitation of customers. In the employment context, non-solicitation agreements are used to prevent a former employee from soliciting customers and attempting to convert those customers to the new company. The same is true in the sale of a business context, where the buyer of the business seeks to prevent the seller from reentering the market and reacquiring its old customers. Non-solicitation agreements that prohibit solicitation of customers are generally enforceable provided the plaintiff can establish a legitimate business interest. That legitimate business interest will be either (1) confidential information or (2) substantial customer relationships.
In this context, confidential information operates as follows: During an employee’s tenure with a company, that employee had access to certain of the company’s confidential information that was used to provide service to a customer. The employee leaves the company and can now unfairly use the company’s confidential information to target that customer. In some instances, the customer’s identity itself could constitute the company’s confidential information. Here as perfect example: A lawn and garden company serves very high end clients in Palm Beach County. Many of these clients have large estates. It’s a very lucrative business. The company has hundreds of active clients. The company assigns multiple clients to each service crew and the crews then perform the work. A crew leader leaves the company, starts his own business and immediately begins soliciting dozens of the company’s customers. These customers are private individuals. But for the employee’s previous work with the company, he never would have had access to those customers. In such an instance, the customer’s identity may fairly be considered the company’s valuable, confidential information.
The other possible interest is customer relationships. In most of cases, the non-solicitation agreement at issue prohibits interfering with any customer relationships. This is where many plaintiffs in non-compete and non-solicitation cases make a tremendous and very costly mistake: They assume that all customer relationships are protectable. They are not. Florida Statutes 542.335 does not protect all customer relationships. Instead, the statute only protects “substantial” customer relationships. There has been a great deal of litigation in Florida over the exact meaning of substantial. Whether or not customer relationships are substantial turns on numerous factors tied to market realities, including the quality of the relationships, the degree of exclusivity, and the nature and amount of competition. Bottom line: Simply because a non-solicitation agreement bars solicitation of all customers does not mean it’s enforceable. Any plaintiff seeking to enforce a non-solicitation agreement should first evaluate the question of substantial customer relationships. Likewise, any individual, seller of a business or hiring company should evaluate the same question before taking any competitive action.
Non-Solicitation Agreements – Other Relationships
Non-solicitation agreements can also be used outside of the customer context. Sometimes, these agreements are used to prevent solicitation of a company’s other employees or its suppliers. With respect to agreements that prohibit a departing employee or seller of a business from soliciting employees, such restrictions are generally enforceable. With respect to agreements that prohibit soliciting suppliers, such agreements are generally unenforceable under Florida law.
Jonathan Pollard, LLC – Fort Lauderdale, Non-Solicitation Attorneys
The firm represents both business and individuals in litigation involving non-solicitation agreements and both prosecutes and defends such claims. If you are faced with the prospect of initiating litigation or defending claims related to a non-solicitation agreement anywhere in the state of Florida, contact our office. We have extensive experience litigating non-solicitation claims in a wide range of industries including healthcare, technology, construction, aerospace, banking, insurance and others. Our attorneys are licensed in all Florida state and federal courts, including the United States District Courts for the Southern, Middle and Northern Districts of Florida. To speak with an experienced Florida non-solicitation lawyer about your case, call our office at 954-332-2380.
Learn More About Jonathan Pollard- Florida Trade Secret Lawyer
To read about recent developments in non-compete litigation and trade secret litigation, visit Jonathan Pollard’s popular the non-compete blog, or check out the firm’s page at JDSupra Business Advisor, which contains some of our recent articles and blog posts.