Taking the fight to the bullies: tortious interference liability for both employer and attorney on baseless restrictive covenants, Part I.

• Author: Ulanowicz, Peter R.
• Position: Labor and Employment Law

Say the words "tortious interference" to any attorney familiar with litigation concerning noncompete and nonsolicitation agreements, and he or she will almost certainly associate it with claims against a former employee for allegedly soliciting the former employer's customers, or with the employee's new employer for causing the employee to violate a restrictive covenant. Very few will consider potential claims that the employee may have against his or her former employer, or even the former employer's attorney. Yet multiple jurisdictions--including Florida --have recognized tortious interference claims when an employer has interfered with a former employee's new employment by threatening litigation against the new employer over a restrictive covenant that fails under the law. In a subject of law in which employees have virtually no room to bargain, this little-known application of the tortious interference doctrine allows an employee to take the fight to his or her former employer--and quite possibly his former employer's counsel--in circumstances when the former employer has overstepped its boundaries and caused the employee to unjustifiably lose his or her job.

Employee Restrictive Covenants in Florida

Before considering the authority that allows a tortious interference claim based upon a former employer's attempts to litigate an unenforceable restrictive covenant, it is first important to look at the requirements for such restrictive covenants to be enforced in Florida. Like most states, (1) Florida does recognize the enforcement of noncompete and nonsolicitation agreements by employers against former employees. However, such enforcement is not without statutory limits. The "go-to" authority for employee restrictive covenants in Florida for such covenants executed on or after July 1, 1996, (2) is F.S. [section]542.335.

Titled "Valid Restraints of Trade or Commerce," [section]542.335 sets forth the main factor to determine whether a restrictive covenant is enforceable or not: the "legitimate business interest." Trade secrets, valuable confidential business information, substantial relationships with specific customers, customer/client goodwill, and extraordinary or specialized training are all legitimate business interests that would support a covenant. (3)

Section 542.335 also requires a restrictive covenant to be reasonable in terms of length, and in cases of employees and independent contractors, the court will presume reasonable any restrictive covenant containing a period of less than six months and unreasonable any covenant exceeding two years. (4) The employer will need to prove the reasonableness of any restrictive covenant between six months and two years long. (5)

An employer alleging a breach of a restrictive covenant is entitled to seek temporary or permanent injunctive relief however, nothing in the statute requires that the employer send a prelitigation notice to either the offending employee, or in the cases of an alleged noncompete violation, the new employer.

The limited parameters of [section]542.335 create defenses to enforcement of restrictive covenants, and on numerous occasions courts have refused to enjoin a former employee under an alleged agreement. Successful defenses have included the inability of an employer to show irreparable harm, (7) an employer's abandonment of the intended line of work, (8) the customer's voluntary choice to seek out the former employee for business, (9) or the lack of substantial relationships between the employer and the customers/clients (for example, when business is obtained through the bidding process). (10) Courts have also held that restrictive covenants have been unreasonable in duration (11) or, in instances concerning noncompete agreements, geographic scope. (12)

Moreover, any contract against an employee that does not abide by the restrictions of [section]542.335 would constitute an unlawful restraint on trade and, thus, violate F.S...