Infinity Home Care, L.L.C. v. Amedisys Holding, LLC

• Decision Date: 18 November 2015
• Docket Number: No. 4D14–3872.,4D14–3872.
• Citation: 180 So.3d 1060
• Parties: INFINITY HOME CARE, L.L.C., and Sylvie Forjet, Appellants, v. AMEDISYS HOLDING, LLC, Appellee.
• Court: Florida District Court of Appeals

180 So.3d 1060

INFINITY HOME CARE, L.L.C., and Sylvie Forjet, Appellants,

v.AMEDISYS HOLDING, LLC, Appellee.

No. 4D14–3872.

District Court of Appeal of Florida, Fourth District.

Nov. 18, 2015.

Christopher V. Carlyle and David A. Monaco of The Carlyle Appellate Law Firm, The Villages, for Appellant–Infinity Home Care, L.L.C.

Cristina E. Groschel and Michael I. Kean of Berman, Kean & Riguera, P.A., Fort Lauderdale, for Appellant–Sylvie Forjet.

Courtney B. Wilson of Littler Mendelson, P.C., Miami, for appellee.

On Appellant's Motion for Rehearing and Motion for Rehearing En Banc

TAYLOR, J.

We decline to reconsider the merits of our decision, but grant rehearing in part to correct a statement in the original opinion.

In this appeal of a temporary injunction to enforce non-compete and non-solicitation provisions of an employment contract, the main issue is whether referral sources for home health services are a legitimate business interest entitled to protection under section 542.335, Florida Statutes (2012). Infinity Home Care, LLC, joined by its current employee, Sylvie Forjet, appeals the temporary injunction, relying on the Fifth District's opinion in Florida Hematology & Oncology v. Tummala, 927 So.2d 135 (Fla. 5th DCA 2006). Tummala held that referring physicians are not a legitimate business interest under section 542.335 because the statute requires that prospective patients be specific and identifiable. We decline to follow Tummala in this case for the reasons discussed below and affirm issuance of the temporary injunction.

Amedisys Holding, LLC, provides home health care services such as in-home nursing and hospice care. For eighteen months between January 2013 and June 2014, Forjet was employed by Amedisys as a Care Transition Coordinator (CTC) in Broward County. As a CTC, Forjet was primarily responsible for developing and maintaining Amedisys's relationships with individual case managers at certain health care facilities that referred their patients to Amedisys for home health services.¹ When Forjet was hired, Amedisys required her to sign a Protective Covenants Agreement which contained a non-compete provision and non-solicitation agreement:

Competition with Company. Employee covenants and agrees that during his/her employment, and for a period of one (1) year after Employee's employment with the Company is terminated or ends for any reason (the "Non–Competition Period"), Employee will not, as an employee, consultant, independent contractor, officer, shareholder, director, partner, owner, or in any other capacity, provide, manage, or supervise services within the "Restricted Area," as such term is hereafter defined, that are the same as or similar in purpose or function to those services Employee has provided to the Company during the "Look Back Period," as hereafter defined, if such services are being provided for the benefit of any business, firm, proprietorship, corporation, partnership, association, entity or venture engaged in any part of the business ("Competing Business") (hereinafter, the "Non–Compete Obligation")....

The "Restricted Area" is Broward County.

Solicitation of Business. During Employee's employment, and for a period one (1) year after Employee ceases to be employed by the Company for any reason, Employee will not knowingly contact, solicit, or communicate with a client, customer, patient or Referral Source of the Company for the purpose of encouraging, causing or inducing the client, customer, patient or Referral Source to cease or reduce doing business with the Company or to divert Business-related opportunities (home health or hospice care) to some person or entity engaged in any part of the Business (other than the Company), nor will Employee aid or assist any other person, business, or legal entity to do any of the aforesaid prohibited acts. The restriction created by this paragraph (the "Non–Solicitation Restriction") is limited to clients, customers, patients and Referral Sources that Employee had material contact or business dealings with during the Look Back Period.

In June 2014, Forjet left Amedisys to work for Infinity, a provider of home health care services that competes directly with Amedisys. She immediately began soliciting referral sources that had previously referred business to Amedisys. The referral source of concern in this case is the Cleveland Clinic.

Amedisys filed suit against Infinity and Forjet for temporary and permanent injunctions. Essentially, Amedisys alleged that Forjet violated the restrictive covenants in her employment agreement by soliciting Amedisys's referral sources while working for Infinity. Count I of the complaint is a breach of employment contract claim against Forjet, and Count II is a tortious interference claim against Infinity. Infinity moved to dismiss the complaint, arguing that referral sources are not a protectable legitimate business interest under section 542.335, Florida Statutes, and the holding in Florida Hematology & Oncology v. Tummala, 927 So.2d 135 (Fla. 5th DCA 2006).

The trial court held an evidentiary hearing on Infinity's motion to dismiss. Forjet, a registered nurse who has worked in the home health care industry in Broward County since 1992, developed the Cleveland Clinic as a referral source in 2006 while employed with another competitor, Gentiva. One of the reasons Amedisys hired her was because of her substantial relationship with the Cleveland Clinic. When Amedisys hired her in late 2012, however, it specifically required her to honor her non-compete agreement with Gentiva and not solicit referrals from any of the case managers at the Cleveland Clinic until her agreement expired. After her Gentiva agreement expired, Forjet began soliciting referrals from the case managers at the Cleveland Clinic on behalf of Amedisys. Amedisys considered these referral sources a vital source of business and spent a substantial amount of time and money developing and maintaining them. Forjet testified that she made regular sales calls and provided modest entertainment (such as lunches, small gifts, and dinner) for the referral sources.

When she resigned from Amedisys, Forjet began soliciting referral sources that had previously referred business to Amedisys, including the same case managers at the Cleveland Clinic. Amedisys's vice president of business development testified that after Forjet left, Amedisys's referrals from the Cleveland Clinic sharply declined. She could not, however, quantify the decline in referrals from Cleveland Clinic or show that the business it lost went to Infinity.

Forjet testified that she believed the restrictive covenants in her agreement with Amedisys prevented her from using only referral sources she first developed while working at Amedisys, not sources she had used for years. She testified that she did not develop any new referral sources while working for Amedisys, and that all of her referral sources existed before she was hired. However, Forjet conceded that there was a turnover in case managers at the Cleveland Clinic during her employment with Amedisys, and she thus had to develop relationships with the new case managers that referred patients to Amedisys.

After the hearing, the trial court granted Amedisys a temporary injunction for one year. The court found that Forjet was violating the restrictive covenants and that the restrictive covenants were enforceable to protect Amedisys's relationships with specific referral sources in Broward County. In concluding that referral sources are a legitimate business interest under section 542.335, Florida Statutes, the trial court relied on Southernmost Foot & Ankle Specialists, P.A. v. Torregrosa, 891 So.2d 591, 593 (Fla. 3d DCA 2004). The court declined to follow Tummala.

Amedisys sought to establish two legitimate business interests: (1) confidential business information, and (2) referral sources. Although the court found that Amedisys established the existence of valuable confidential business information, it did not find that Forjet had used this information such that an injunction was necessary to protect it. The court, however, found that Amedisys did establish the existence of substantial relationships with referral sources that entitled it to a temporary injunction.

The issue we address in this appeal is whether "referral sources" for home health services are a protectable "legitimate business interest" under section 542.335, Florida Statutes. In Torregrosa, the Third District accepted the trial court's finding that "referral doctors" are a legitimate business interest of the plaintiff's podiatry practice, subject to protection under a non-compete agreement. 891 So.2d at 594. By contrast, the Fifth District held in Tummala that referral doctors are not a legitimate business interest under the statute. 927 So.2d at 139. Infinity urges us to follow Tummala, arguing that it is more on point and provides an analysis of the statute's applicability to referral sources.

Section 542.335, Florida Statutes, governs enforcement of non-compete agreements and other restrictive covenants. It requires that a restrictive covenant be justified by a "legitimate business interest" for enforcement. § 542.335(1)(b), Fla. Stat. (2012). Section 542.335 provides a list of "legitimate business interests," but it specifically states that the list is not exclusive. Among the legitimate business interests listed are "[s]ubstantial relationships with specific prospective or existing customers, patients, or clients." § 542.335(1)(b) 3., Fla. Stat. (2012).²

In University of Florida, Board of Trustees v. Sanal, 837 So.2d 512 (Fla. 1st DCA 2003), the First District construed the "specific prospective patients" language in the statute in affirming the trial court's determination that the university could not enforce its non-compete agreement with a former physician-employee. The university had sought to prohibit the physician from treating all persons residing in the designated geographic...