- Florida Court Accepts Novel Defense to Claim of Tortious Interference with Non-Compete Agreement
- April 3, 2009
- Law Firm: Epstein Becker & Green, P.C. - Miami Office
When a former employee is in violation of a non-compete agreement, the former employer often files suit not just against the former employee for breach of contract, but also against the new employer for tortious interference. Under Florida law, the elements of a tortious interference claim are as follows:
(1) the existence of a business relationship; (2) knowledge of the relationship on the part of the defendant; (3) an intentional and unjustified interference with the relationship by the
defendant; and (4) damages to the plaintiff as a result of the breach of the relationship.
The Second District Court of Appeals' recent decision in Fiberglass Coatings v. Interstate Chemical, Inc., Case No. 2D-08-1847 (Fla. 2d DCA, February 27, 2009), illustrates an interesting defense to a tortious interference claim.
Fiberglass Coatings, Inc. (FCI) had a non-compete agreement with its salesman Robert Hutchens. Hutchens left FCI to work for a competitor, Polymeric. Hutchens left Polymeric after a short time to work for another competitor of FCI's, Interstate Chemical, Inc. While at Interstate, Hutchens allegedly solicited FCI's customers. FCI filed suit against Interstate for tortious interference. On a motion for summary judgment, Interstate argued that FCI could not meet the causation element of its tortious interference claim because Hutchens was predisposed to breaching his non-compete agreement, as evidenced by Hutchens' employment with Polymeric. The trial court agreed with Interstate, concluding that Interstate did not cause or induce Hutchens to breach his non-compete agreement.
The Second DCA affirmed, citing Florida case law and the Restatement (Second) of Torts:
Causation requires a plaintiff to "prove that the defendant manifested a specific intent to interfere with the business relationship." [Chicago Title Ins. Co. v. Alday-Donalson Title Co. of Fla., Inc. 832 So. 2d 810, 814 (Fla. 2d DCA 2002) (citing Tamiami Trail Tours, Inc. v. Cotton, 463 So. 2d 1126, 1127 (Fla. 1985))]. No liability will attach unless it is established "that the defendant intended to procure a breach of the contract." Id. " 'One does not induce another to commit a breach of contract with a third person under the rule stated in this Section when he merely enters into an agreement with the other with knowledge that the other cannot perform both it and his contract with the third person.' " Martin Petroleum Corp. v. Amerada Hess Corp., 769 So. 2d 1105, 1107 (Fla. 4th DCA 2000) (quoting Restatement (Second) of Torts § 766 cmt. n (1977)). As noted by the Fourth District, Florida follows this section of the Restatement in these circumstances. Id.
Under this prevailing case law, we conclude that the circuit court did not err in granting summary judgment under the "employment" theory of liability set forth in paragraph 29 of the amended complaint. As explained by comment n of the Restatement (Second) of Torts, section 766, Interstate merely entered into an employment agreement with Hutchens knowing that he could not honor his covenant not to compete with FCI and at the same time work for Interstate.
The takeway from this case is that, absent evidence that the new employer induced the former employee to violate his non-compete agreement, merely hiring an employee whom the employer knows to be in violation of a non-compete agreement may not be sufficient to sustain a tortious interference claim under Florida law.
Having said that, it should be noted that the Second DCA did not let Interstate completely off the hook. Because Hutchens had allegedly solicited FCI's customers, the court held that Interstate could be held liable for tortious interference under a "solicitation of customers" theory. In other words, although Interstate may not have crossed the line in hiring Hutchens despite his non-compete agreement, it may have crossed the line by inducing him to solicit FCI's customers in violation of that agreement. The court therefore affirmed in part, and reversed in part, the trial court's summary judgment order.