Restrictive covenants have become increasingly prevalent as a prophylactic measure to ensure adequate protection of an employer’s legitimate business interests. These restrictive covenants are generally found in the employee’s employment agreement. Historically, two Florida Statutes (F.S.) have governed the enforcement of restrictive covenants: (1) F.S. 542.33 and (2) F.S. 542.335. Although F.S. 542.18 provides that “every contract, combination, or conspiracy in restraint of trade or commerce in this state is unlawful,” exceptions can be found in F.S. 542.335 (valid restraints of trade or commerce). Peter Mavrick is a Fort Lauderdale non-compete lawyer who has substantial and successful experience in non-compete litigation.
The current non-compete statute (F.S. 542.335(3)) governs non-compete agreements entered on or after July 1, 1996 and repealed its predecessor non-compete statute (F.S. 542.33). Although the former non-compete statute (F.S. 542.33) did not reference training, case law interpreting F.S. 542.33 has found that “extraordinary” training could justify a non-compete. See Dyer v. Pioneer Concepts, Inc., 667 So. 2d 961 (Fla. 2d DCA 1996) (holding that “extraordinary” training which the employer has provided is a legitimate business interest authorizing contracts in the restraint of trade under F.S. 542.33). In comparison, the current and applicable non-compete statute specifically lists two types of training that constitute legitimate business interests: “specialized training” and “extraordinary training.” See F.S. 542.335(1)(b)(5) (“extraordinary or specialized training”).
Two Florida appellate courts have interpreted the term “specialized training” as being satisfied when the employer made a substantial investment in training the employee. The first is Balasco v. Gulf Auto Holding, Inc., So. 2d 858, 860 (Fla. 2d DCA 1998), where the Second District Court of Appeal upheld an injunction enforcing a covenant not to compete protecting legitimate business interests of an auto dealership in the specialized training provided to its sales personnel. The Second District Court of Appeal held that the non-compete “was necessary to protect the substantial investment the employer makes in specialized training for its sales staff” based on testimony from the employer that (1) “when productive [sales] associates leave they are replaced with ‘raw recruits’ who may take up to six months to develop’” and (2) the non-compete agreement “was intended to prevent substantial drops in production triggered by the loss of experienced sales associates who are lured away by managers formerly employed by the dealership.”
Similarly, in Aero Kool Corporation v. Oosthuizen, 736 So. 3d 25, 25-26 (Fla. 3d DCA 1999), the Third District Court of Appeal held that the employer had “a legitimate business interest in the extensive, specialized training in aircraft component repair that it provided” to its employee. In Aero Kool, prior to his employment, the employee had worked at a restaurant and had no experience or training in aviation repair. The employee was also provided over 195 hours of specialized training, enabling him to become skilled in repairing and overhauling aircraft components, particularly heat exchangers. He received a Temporary Airman Certificate from the Federal Aviation Administration (FAA), authorizing him to exercise the privileges of a Repairman “for manager of Heat Exchanger and accessories [while] employed by Aero Kool.” The Third District Court of Appeal ultimately reversed the trial court’s denial of the temporary injunction and granted the temporary injunction after finding that the employer has a legitimate business interest in the extensive, specialized training in aircraft component repair that it provided to its employee. The specialized training the employee gained would create an unfair advantage that would be utilized by other competitors at the expense of employer.
This is precisely the type of unfair advantage the Supreme Court of Florida described in its recent decision in White v. Mederi Caretenders Visiting Services of Se. Florida, LLC, 226 So. 3d 774, 785 (Fla. 2017): “For an employer to be entitled to protection, there must be special facts present over and above ordinary competition such that, absent a non-competition agreement, the employee would gain an unfair advantage in future competition with the employer.” The employee in Aero Kool would have gained an unfair advantage in future competition with his former employer had he been allowed to utilize all the training he received for the benefit of a competitor. Thus, the former employer was entitled to protection under White.
Peter Mavrick has successfully represented many clients in Florida non-compete cases, including cases in Miami-Dade, Broward, and Palm Beach Counties (encompassed by the Third and Fourth District Courts of Appeal) and in Lee, Collier, and Sarasota Counties (encompassed by the Second Circuit Court of Appeal). This article does not serve as a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311.