In Florida, non-compete agreements are used to protect an employer’s “legitimate business interests.” The Florida Supreme Court recently stated that referral sources may be considered a legitimate business interest. In both White v. Mederi Caretenders Visiting Services of Southeast Florida and Americare Home Therapy, Inc. v. Hiles, the employers hired an individual whose job duties included soliciting health care providers for home health care service referrals.  The employees were required to sign a non-compete agreement that restricted their ability to work for competitors for a year after termination; in both instances, the employers sued when their respective ex-employee went to work for a competitor after their termination.

The Florida Supreme Court identified the crux of both cases as determining whether or not the home health care service referrals qualified as a legitimate business interest.  Ultimately, the court stated that the statute did not specifically preclude a referral source from being recognized as a legitimate business interest.  However, the court cautioned that employers should not consider these cases as a ticket to consider all referral sources as a legitimate business interest.  Instead, courts must analyze the facts of any similar case to determine how critical the referral source is to the business, the nature of the business, and the scope of business’s investment in developing referral relationships.