Harm to Ex-Employee is Not a Restrictive Covenant Factor
The Florida Second District Court of Appeal recently enforced a restrictive covenant through a temporary restraining order (“TRO”). See Florida Digestive Health Specialist, LLP v. Colina, — So.3d —-, 2015 WL 6874913 (Fla. 2d DCA Nov. 4, 2015). More specifically, the Second DCA found that a gastroenterologist was bound by a restrictive covenant, which limited how he could compete with his former employer. In entering the TRO, the Second DCA did not consider any alleged damages the doctor would suffer if the injunction was granted.
In this case, the doctor left his solo practice to join a company called Florida Digestive Health Specialists, LLC (“FDHS”). When he joined FDHS he executed partnership agreements that contained a restrictive covenant. This covenant regulated his post-FDHS work for a period of two years by limiting his ability to practice gastroenterology for a FDHS competitor within the counties that FDHS operated. This covenant, however, allowed him to return to his solo practice immediately after working for FDHS.
Despite the restrictive covenant, the doctor left FDHS to join a large competitor with over seventy physicians. In response, FDHS moved to enjoin him from working for the competitor for two-years, the period in his restrictive covenant.
The trial court found that the doctor breached his partnership agreements by joining the competitor but was not bound by the restrictive covenants. The trial court partly reached this conclusion by finding that “the threatened injury to [the doctor] outweigh[ed] the possible harm to FDHS.”
The Second DCA, however, disagreed with the trial court’s analysis. The Second DCA held whether the party against whom an injunction is sought will suffer greater injury by imposition of an injunction is not a TRO factor. In fact, the Second DCA noted that Florida statutes and case law specifically prohibit such consideration. The Second DCA, therefore, held the trial court abused its discretion by finding the restrictive covenant was not binding and remanded the case with instructions to enforce the restrictive covenants.