Florida law permits employment contracts that contain “non-compete” or similar restrictive covenants in order to protect the employer’s “legitimate business interests.” A non-compete agreement might, for example, restrict an employee from leaving and working for a direct competitor for a limited period of time thereafter. Restrictive covenants may also prevent an employee from leaving and taking clients or confidential business information to a new employer.
A recent decision by a federal judge in Orlando helps illustrate the application of Florida law on this subject. The case involves a woman who left her job as an executive at one company for a similar position with its closest competitor. Her former employer sued to enforce a non-compete agreement after accusing her of improperly trying to solicit its customers.
Technomedia Solutions, LLC v. Scopetto
Technomedia sells audio-visual and other media content to retailers and other clients. In 2008, Technomedia hired Morgan Scopetto as a sales account manager for its Orlando office. Scopetto signed a non-compete agreement as a condition of her employment.
Scopetto briefly left Technomedia in 2011 for another company but returned later that year as a vice president. Upon her rehiring, Scopetto signed a new, broader non-compete agreement that required her not to disclose or use Technomedia’s “various trade secrets and other confidential information” outside the scope of her employment.
In 2013, Technomedia learned that its principal competitor, Electrosonic, Inc., was trying to hire Scopetto. Scopetto confirmed this was the case and resigned her position with Technomedia. She subsequently sent a mass email to her “friends and colleagues” informing them of her new position with Electrosonic and promoting her new employer’s strengths. The email recipients included at least eight existing Technomedia clients.
Technomedia filed suit in Orlando federal court against Scopetto. The company claimed Scopetto’s email was a “solicitation of business from some of Technomedia’s existing and prospective clients in breach of Scopetto’s Non-Compete Agreement.” Technomedia asked the court to issue an injunction against Scopetto to prevent any future violations of her non-compete agreement.
On December 13, 2013, U.S. District Judge Charlene Edwards Honeywell issued a preliminary injunction against Scopetto and simultaneously rejected her motion to dismiss Technomedia’s complaint. Judge Honeywell said Technomedia had established a likelihood of proving its case on the merits. Technomedia “is entitled to protect the goodwill that it has established with its customers,” Judge Honeywell said, and that Florida law allowed for enforcement of non-compete agreements to protect the “significant amounts of time and money” Technomedia expended on “creating commercial goodwill and cultivating prospective business relationships with potential clients.”
Judge Honeywell further noted that Florida law only enforces non-compete agreements that “are reasonable in time, area, and line of business.” Scopetto’s non-compete agreement prohibited her from soliciting Technomedia’s customers for two years after ending her employment. Judge Honeywell said this period of time was “reasonable on its face” based on previous Florida court decisions. The judge rejected Scopetto’s argument that the prohibition was “overbroad.”
Should I Have My Employees Sign Non-Compete Agreements?
Non-compete agreements are not a necessity for every Florida business. But if your business relies heavily on proprietary or confidential information, it might make sense to enter into non-compete agreements with key employees. As with all such decisions, it’s best to work with an experienced Florida business attorney who can advise you on the best approach. Contact John S. Sarrett in Naples today if you have any questions.