An employer has a legitimate business interest in prohibiting an employee from soliciting customers whom the employer has a substantial relationship. Hilb Rogal & Hobbs of Fla., Inc. v. Grimmel, 48 So.3d 957, 31 IER Cases 1014 (Fla. App. 2010) , citing Brown & Brown, Inc. v. Ali, 494 F.Supp.2d 943 (N.D. Ill. 2007) (applying Florida law). Likewise, “the right to prohibit the direct solicitation of existing customers is a legitimate business interest, and a covenant not to compete which includes a non-solicitation clause is breached when a former employee directly solicits customers of his former employer.” Atomic Tattoos, LLC v. Morgan, 45 So.3d 63 (Fla. App. 2010) quoting Dyer v. Pioneer Concepts, Inc., 667 So.2d 961 (Fla. App. 1996).
Initiation of Contact by Customer – Contract Specific Analysis
An employer has a legitimate protectable business interest in prohibiting solicitation of its customers with whom the employee has a substantial relationship. Hilb Rogal & Hobbs of Florida v. Grimmel, 16 So.3d 167 (Fla. App. 2009), citing Scarbrough v. Liberty National Life Insurance Co., 872 So.2d 283, 285 (Fla. 1st DCA 2004). The right to prohibit the direct solicitation of existing customers is a legitimate business interest, and a covenant not to compete which includes a nonsolicitation clause is breached when a former employee directly solicits customers of the former employer. Id.
In J.K.R., Inc. v. Triple Check Tax Service, Inc., 736 So.2d 43, 44 (Fla. 1st DCA 1999), the court held that a non-solicitation provision precludes the former employees “from taking proactive steps” to obtain the employer’s clients. However, it “do[es] not disallow them from accepting former clients who actively seek their assistance.” Id. Notably, the covenant at issue in J.K.R. prohibited the former employee from “calling upon, soliciting, or taking away” clients.
On the contrary, in Scarbrough v. Liberty Nat. Life Ins. Co., 872 So. 2d 283, 284 (Fla. 1st DCA 2004), the 1st DCA held that solicitation can occur where the customer seeks out the former employee. Further, in Hilb, the Fifth District held that an employer has a legitimate business interest in customer relationships even if the employer’s customers elect on their own to end their relationship with the employer and start a business relationship with the departing employee where the contractual restrain prevented customer contact in addition to solicitation. Likewise, in Environmental Services, Inc. v. Carter, 9 So.3d 1258 (Fla. App. 2009) , the Fifth District recognized that solicitation by an employee can exist in violation of a non-compete agreement “regardless of whether the customer or employee initiated the transaction.” Envtl. Servs., 9 So. 3d at 1266.
In sum, if a contractually specified restrain only prohibits solicitation, some Florida case law suggests that the restrain has not been violated if the customer seeks out the former employee. However, where the contractually specified restrain prohibits the former employee from communicating with, servicing, or anything more with the former customer, the restraint is likely enforceable and can be breached regardless of whether the customer initiates contact with the former employee.
W Mason is a partner with Fox Rothschild LLP and serves in the Firm’s Litigation and Financial Services Industry departments in Fox Rothschild’s West Palm Beach office. An accomplished business trial attorney, W represents both plaintiffs and defendants in state and federal courts in employment disputes involving restrictive covenants, shareholder disputes, contract disputes, banking litigation, fraud claims, Uniform Commercial Code (UCC) claims, and other commercial disputes.