Environmental Services, Inc. (“ESI”) appeals a trial court order denying in part its application to temporarily enjoin three of its former employees, Ryan Carter, Daniel LeJeune and Devin Hannon (collectively “former employees”), and their current employer, Natural Resource Consultants, LLC (“NRC”), from violating certain restrictions contained in their confidentiality and non-solicitation agreements (“agreement”) with ESI. We affirm in part, reverse in part, and remand for further proceedings.
ESI is an environmental consulting firm that works with property owners, builders and developers in connection with permitting and regulatory compliance. ESI analyzes data that it obtains through field assessments and aerial photography of its clients’ properties to identify issues concerning wetlands, protected habitats and protected species. The former employees were all employed at ESI’s St. Augustine office until late February 2008. Carter was the manager of ESI’s St. Augustine office, and supervised its employees, including LeJeune and Hannon. He also managed all client relationships in the office; had access to ESI’s confidential records, including financial records, client files, proposals, billing rates, employee salaries and marketing strategies; coordinated the office’s administrative activities; and oversaw personnel and training of staff. LeJeune was a senior project manager who also had access to ESI’s confidential files and trade secrets, including client files, proposals, billing rates and marketing strategies. LeJeune, like Carter who was just above him in the corporate hierarchy, represented clients before governmental agencies. Hannon was a senior graphics systems technician who engaged in marketing activities for ESI but typically had little client contact.
Carter and Hannon both admitted that they signed the agreement. LeJeune admitted signing an agreement, but testified that he only “skimmed it” and could not recall its contents. ESI was unable to locate LeJeune’s agreement in its files, and could only produce the agreements signed by Carter and Hannon. Those agreements were identical. Robin Bullock, ESI’s human resources director, testified that ESI had only used one form of the agreement since 2005.
According to LeJeune, beginning in October 2007 and continuing until February 2008, he, Carter and Hannon discussed leaving ESI and starting a new environmental consulting business. Between December 2007 and February 2008, Carter, while working for ESI, performed environmental work for LAN Associates (“LAN”), an engineering firm, and exchanged several e-mails with LAN officers. In these emails, Carter discussed ESI’s compensation rates and attached documents stamped “confidential” concerning compensation proposals for Carter, LeJeune, and Hannon. Carter also discussed LAN’s bonus program and LAN’s attorneys reviewed Carter’s agreement with ESI. Ultimately, LAN agreed to finance NRC, the new company created by the former employees, in exchange for a 63.88 percent ownership interest in NRC.
ESI subsequently filed suit for injunc-tive relief, declaratory judgment, and damages against the former employees and NRC, alleging various violations of their agreements by performing services for ESI’s customers after they resigned, by retaining and utilizing ESI’s confidential and proprietary information in their new business, and by interfering with the rela
The trial court granted in part and denied in part ESI’s motion for temporary relief. The court declined to enforce any restrictive covenants against LeJeune because it could not determine the precise terms of the agreement due to ESI’s failure to produce an executed copy of the agreement. However, the court determined that as to Carter and Hannon, the agreement contained five restrictive covenants: non-competition, non-solicitation, confidentiality, surrender of employment documents upon termination of employment and prohibition on interference with other ESI employees’ employment. The court refused to enforce the non-compete clause against Carter and Hannon, concluding that the provision was invalid as it was hidden within a two-paragraph clause entitled “non-solicitation.” The trial court further held that the non-compete provision was invalid as it was not limited to a specific geographic area. While the court ruled that the non-solicitation covenant was valid, it refused to enforce that covenant, finding that ESI’s clients sought out Carter and Hannon without any solicitation from them. As to the confidentiality covenant, the court found that ESI was entitled to temporary injunctive relief. As a result, it prohibited Carter and Hannon from using or disclosing ESI’s confidential information and/or trade secrets, as well as ordered them to return all documents containing ESI’s confidential information to ESI. Finally, the court determined that the prohibition on interference with ESI’s employees was valid but found that ESI failed to prove its entitlement to temporary injunctive relief as the evidence revealed that Carter, Hannon and LeJeune did not entice each other to resign from ESI.
We find no error with the court’s determination on the non-solicitation, confidentiality, surrender of employment documents upon termination of employment and prohibition on interference with other ESI employees’ employment provisions of the agreement. However, we reverse the court’s determination as to the non-compete provision and its refusal to enforce the agreement against LeJeune.
In order to establish entitlement to temporary injunctive relief, a party must prove: (1) the likelihood of irreparable harm, (2) the unavailability of an adequate remedy at law, (3) a substantial likelihood of success on the merits, and (4) that a temporary injunction will serve the public interest.
Yardley v. Albu,
Post-employment restrictive covenant agreements are valid restraints of trade or commerce under certain condi
Section 542.335(1), Florida Statutes, permits enforcement of contracts that restrict or prohibit competition, but only “so long as such contracts are reasonable in time, area, and line of business....”
1
The statute also requires “that any restrictive covenant be set forth in a writing signed by the person against whom enforcement is sought, and that the restraint be shown to be reasonably necessary to protect a ‘legitimate business interests’ justifying the restriction.”
Henao,
We review the interpretation of a contract de novo.
Steritech Group, Inc. v. MacKenzie,
In relevant part, the agreement prohibited:
3. Non-Solicitation
a. During the course of his/her employment with the Company, Employee shall devote to the Company all of his/her working time, attention, knowledge and skills, and shall not accept alternative employment or engage in any independent and/or separate business activity in the Company’s Field of Business.
b. For a period of one (1) year after the termination of his/her employment for any reason whatsoever, Employee shall not, directly or indirectly, solicit business from or perform services for any current, former or prospective customers of the Company with whom Employee had any business-related contact (contact intended to advance the Company’s business interests) during his/her employment with the Company.
ESI argues that the trial court erred in failing to enforce paragraph 3.b. of the agreement, which prohibited the former employees from “performing] services for any current, former or prospective customers of the Company with whom Employee had any business-related contact ... during his/her employment with the Company.”
Restrictive covenants are valid if reasonable in time, area and line of business, set forth in a writing signed by the party against whom enforcement is sought, and the contractually specified restraint is supported by at least one legitimate business interest justifying the restraint, and reasonably necessary to protect that interest. § 542.335, Fla. Stat. (2005);
Henao,
The non-compete clause does not prohibit
all
competition by the former employees with ESI. Rather, it prohibits the former employees from performing services “for any current, former or prospective customers” of ESI “with whom the Employee had any business-related contact (contact intended to advance the Company’s business interests) during his/her employment with the Company.” Other than customers with whom the former employees had busi
Decisional law demonstrates that a relatively narrow restriction, such as the one here, is not invalid because it fails to contain a geographic limitation.
See Health Care Fin. Enter., Inc. v. Levy,
The trial court’s concern regarding the “hidden” nature of the non-compete language is also unpersuasive. The language employed in the agreement is clear and unambiguous. Under such circumstances, the contracting parties are bound by the contractual language.
Coastal Loading,
The former employees argue that equitable estoppel bars enforcement of the non-compete provision because ESI’s memorandum to employees, furnished contemporaneously with the agreement, described the confidentiality and non-solicitation provision as follows:
The agreement basically asks that if you leave ESI you do not contact any of the clients you gained or made contact with while employed with ESI.... This does not mean that if you left ESI you could not work in your field it simply means you cannot contact any of your ESI clients within a one year time frame from the time you leave.
10. Binding Agreement
This Agreement constitutes the complete agreement between the parties with respect to the subject matter contained herein and revokes and supersedes all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral.
Although the existence of a merger clause does not conclusively establish that the integration of the agreement is total, it is a highly persuasive statement that the parties intended the agreement to be totally integrated and generally works to prevent a party from introducing parol evidence to vary or contradict the written terms.
See Jenkins v. Eckerd Corp.,
Equally unavailing is the former employees’ argument that ESI failed to present sufficient evidence of a “legitimate business interest.” The former employees note that former clients are not included among the “legitimate business interests” protected by section 542.335(l)(b), which references “substantial relationships with specific prospective or existing customers.” We agree that the protection of former customers generally does not qualify as a legitimate business interest where no identifiable agreement exists with such customers establishing that they would return with future work.
See generally Ethan Allen, Inc. v. Georgetown Manor, Inc.,
Still, relying on
Shields v. Paving Stone Company, Inc.,
The former employees maintain that the evidence established that ESI’s customers elected to end their relationship with ESI of their own accord and sought out NRC. As a result, the former employees argue that ESI lacked any legitimate business interest worthy of protection by way of enforcement of the non-compete clause. In
Scarbrough v. Liberty National Life Insurance Co.,
The Lost Agreement
Section 542.335(l)(a), Florida Statutes, provides that “[a] court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought.” While Lejeune admitted that he signed an agreement in August 2007, he could not recall its terms, and ESI was unable to produce the actual document or a copy of it. ESI argued that the document was lost and tried to establish its contents through Bullock, who testified that ESI had only used one form of the agreement since 2005. The trial court refused to enforce the agreement against Lejeune, finding:
[ESI] failed to provide the Court an executed Agreement for Daniel Lejeune [sic]. Instead [ESI] provided the Court testimony that Lejeune was provided with the Agreement during his employment with ESI and that execution of the agreement was a condition of employment. Further, Lejeune testified that he signed a non-solicitation agreement while employed with ESI. However, Le-jeune testified that he was unsure as to the terms of that agreement. § 542.335 provides: “A court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought.” Fla. Stat. § 542.335(l)(b). Defendant Le-jeune clearly opposed the Agreement’s enforcement against him. Without a copy of an executed Agreement, the Court is unable to enforce the restrictive covenants contained therein against the particular defendant as the Court is unable to determine the precise terms and validity of the terms.
On appeal, ESI argues that as the written executed agreement was lost, the trial court should have allowed it to establish the contents of the agreement pursuant to section 90.954, Florida Statutes (2005).
Section 90.954(1), Florida Statutes (2008), provides,
inter alia,
that the original of a writing is not required and other evidence of its contents is admissible when “all originals are lost or destroyed, unless the proponent lost or destroyed them in bad faith.” Florida law expressly permits the introduction of parol evidence to prove the contents of a contract where the proponent provides a satisfactory explanation that the original contract was lost or destroyed. § 90.954(3), Fla. Stat. (2008);
Ins. Co. of State of Pa. v. Genova Exp. Lines, Inc.,
We find no merit in the remaining issues raised by ESI. The order is affirmed in part, reversed in part and remanded for further proceedings consistent herewith.
AFFIRMED in part; REVERSED in part; and REMANDED.
Notes
. By contrast, the previous version provided that, except to the extent authorized in section 542.33(2) and (3), all restraints of trade were illegal and unenforceable. See § 542.33(1), Fla. Stat. (1995). Given this significant change in approach, decisional law construing restrictive covenants in employment agreements executed prior to 1996 must be carefully scrutinized to determine whether it comports with the terms of the current section 542.335.
. Other “legitimate business interests’’ under section 542.335(l)(b) include trade secrets, valuable confidential business and professional information that otherwise does not qualify as trade secrets, and customer, patient or client goodwill, which includes “extraordinary or specialized training.”
.The courts also recognize that the public has an interest in the enforcement of valid restrictive covenants.
N. Am. Prods. Corp. v. Moore,
.
Failure of the former employees to adequately read and understand the terms of the confidentiality and non-solicitation agreements does not constitute a valid defense to enforcement of such agreements.
See Merrill, Lynch, Pierce, Fenner & Smith, Inc. v. Benton,
. A merger or integration clause is "[a] contractual provision stating that the contract represents the parties' complete and final agreement and supersedes all informal understandings and oral agreements relating to tire subject matter of the contract.”
Jenkins v. Eckerd Corp.,
. We note that the former employee's reliance on Kephart v. Hair Returns, Inc., 685 So.2d 959 (Fla. 4th DCA 1996), is misplaced. In Kephart, the employee, a hair replacement technician, signed an agreement with her employer containing a non-compete clause, which specifically prohibited her from servicing the employer’s customers for one year following termination of employment. Following her termination, the employee began working for a competitor and servicing her former employer's customers. The employee admitted servicing these customers but only because they sought her out. The appellate court reversed the temporary injunction, explaining the then-applicable statute, section 542.33, Florida Statutes (1995), did not prohibit servicing customers who voluntarily follow an employee to his/her new place of employment, and there was no finding that the former employee directly solicited the customers or used her former employer’s trade secrets or customer lists. As a result, the court concluded that there was no irreparable harm and determined that the injunction was issued in error. Unlike our present case, Kep-hart: (1) involved application of the earlier statute (section 542.33) governing restrictive covenants, which operated from the premise that all restraints of trade were illegal and unenforceable other than the exceptions contained in the statute; (2) did not involve trade secrets or confidential business information and their misappropriation by the employee; and (3) concerned whether solicitation occurred, not enforcement of a restriction against performing services for former clients.