Infinity Home Care, L.L.C. and Sylvie Forjet v. Amedisys Holding, LLC

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

INFINITY HOME CARE, L.L.C., and SYLVIE FORJET,

Appellants,

v.

AMEDISYS HOLDING, LLC,

Appellee.

No. 4D14-3872

[ November 18, 2015 ]

Appeal of non-final orders from the Circuit Court for the Seventeenth

Judicial Circuit, Broward County; Jeffrey E. Streitfeld, Judge; L.T. Case

No. CACE 14-014314 (07).

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

1 Forjet’s other duties included meeting with patients to develop case plans and

following the patients through plan completion.

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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)

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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

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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

2 Section 542.335 (1)(b), Florida Statutes, provides as follows:

(b) The person seeking enforcement of a restrictive covenant shall

plead and prove the existence of one or more legitimate business

interests justifying the restrictive covenant. The term “legitimate

business interest” includes, but is not limited to:

1. Trade secrets, as defined in s. 688.002(4).

2. Valuable confidential business or professional information that

otherwise does not qualify as trade secrets.

3. Substantial relationships with specific prospective or existing

customers, patients, or clients.

4. Customer, patient, or client goodwill associated with:

a. An ongoing business or professional practice, by way of trade

name, trademark, service mark, or “trade dress”;

b. A specific geographic location; or

c. A specific marketing or trade area.

5. Extraordinary or specialized training.

Any restrictive covenant not supported by a legitimate business

interest is unlawful and is void and unenforceable.

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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 area after his employment with the university

ended. The court, however, looked to the “clear and unambiguous”

language of the phrase “specific prospective patients” in concluding that

the statute limited the restrictive covenant to specific patients – not

prospective patients. Finding no “legitimate business interest” in

unidentified prospective patients, the First District reasoned:

We can discern no ambiguity in the language of section

542.335(1)(b)3. It strikes us as relatively clear that the

adjective “specific” used to modify “prospective patients” was

intended to have its plain or ordinary meaning of “particular.”

In such a situation, there is nothing to construe. See, e.g.,

A.R. Douglass, Inc. v. McRainey, 102 Fla. 1141, 1144, 137 So.

157, 159 (1931) (“The intention and meaning of the

Legislature must primarily be determined from the language

of the statute itself and not from conjectures aliunde. When

the language of the statute is clear and unambiguous and

conveys a clear and definite meaning, there is no occasion for

resorting to the rules of statutory interpretation and

construction; the statute must be given its plain and obvious

meaning.”). Courts are “without power to construe an

unambiguous statute in a way which would extend, modify,

or limit its express terms or its reasonable and obvious

implications. To do so would be an abrogation of legislative

power.” Am. Bankers Life Assurance Co. of Fla. v. Williams,

212 So. 2d 777, 778 (Fla. 1st DCA 1968). Moreover, the

construction advocated by the University would render

meaningless the words “[s]ubstantial relationships” at the

beginning of subparagraph 3 because one cannot have

“substantial relationships” with “prospective patients” who

are unidentified, and unidentifiable. Accordingly, we hold

that, to qualify as a “legitimate business interest” pursuant to

section 542.335(1)(b)3, a “relationship” with a “prospective

patient” must be, in addition to “substantial,” one with a

particular, identifiable, individual.

Sanal, 837 So. 2d at 516.

In Tummala, the Fifth District extended the analysis in Sanal when it

ruled that referral sources are not legitimate business interests under

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section 542.335. The court concluded that recognizing referral sources for

prospective unidentified patients as a “legitimate business interest” would

be inconsistent with the statute, because the statute requires a

“substantial relationship” with a “specific” prospective patient. The court

explained:

What referring physicians supply is a stream of unidentified

prospective patients with whom Appellants had no prior

relationship. Therefore, to accept referring physicians as a

statutory “legitimate business interest,” would completely

circumvent the clear statutory directive that “prospective

patients” are not to be recognized as such. The trial court

correctly found that: “[A]s stated in Sanal, to qualify as a

‘legitimate business interest,’ a ‘relationship’ with a

‘prospective patient’ must be substantial and one with a

specific, identifiable individual and the lack of such a

relationship with a patient does not become a legitimate

business interest simply by virtue of being referred by a

physician.” Sanal, 837 So. 2d at 515–16. We see no way to

recognize referring physicians as a legitimate business

interest and still give effect to the plain language of the

statute.

Tummala, 927 So. 2d at 139 (footnote omitted) (quoting Univ. of Fla., Bd.

of Trs. v. Sanal, 837 So. 2d 512, 515-16 (Fla. 1st DCA 2003)). In footnote

4, the Fifth District acknowledged that its holding conflicted with the Third

District’s decision in Torregrosa, which approved the trial court’s finding

that referral doctors are a legitimate business interest.3

The Fifth District opined that referral sources should be recognized as

a “legitimate business interest,” stating:

[T]he evidence was clear that appellants (and most other

medical specialists) receive the significant share of their new

patients from referring physicians. They expend effort, money

and energy to cultivate referral relationships. . . . Because

referring physicians are the major source of new business for

a specialist’s medical practice, they are perhaps Appellants’

3 The Florida Supreme Court initially accepted review and heard argument, but

then decided review was improvidently granted. Fla. Hematology & Oncology

Specialists v. Tummala, 969 So. 2d 316 (Fla. 2007). Justice Lewis dissented with

an opinion arguing the Court should resolve the conflict. Id. at 318.

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most crucial “business interest.”

Tummala, 927 So. 2d at 138. Yet, the Fifth District considered itself

hampered by the express language of the statute.

We do not agree that the statute should be so narrowly construed as to

exclude referral sources as a legitimate business interest. The statute does

not expressly exclude referral relationships and neither does the holding

in Sanal. In Sanal, the court correctly found that, with respect to patients

of a medical practice, the statute expressly defined “legitimate business

interest” to include only specific patients – not prospective ones.

Section 542.335, however, clearly states that the legitimate business

interests listed in the statute are not exclusive. This allows the court to

examine the particular business plans, strategies, and relationships of a

company in determining whether they qualify as a business interest

worthy of protection. Relationships with specific referral sources, which

are not mentioned in the statute, are not the same as relationships with

unidentified prospective patients. Here, it is undisputed that the

relationships Amedisys is trying to protect are its referral sources. As the

record shows, these doctors and clinics with whom it has developed

substantial relationships are the “lifeblood” of its home health care

business. The industry carefully cultivates these relationships over time

and heavily depends upon them as a source of business. These referral

sources appear to us to be a legitimate business interest as contemplated

by section 542.335, Florida Statutes.4

In the contract covenant at issue here, “referral sources” are specifically

mentioned as a valuable business interest. Amedisys hired Forjet because

of her experience and contacts, compensated her accordingly, and

supported her in maintaining and expanding those contacts. She, in turn,

agreed not to solicit them for a competitor once she left Amedisys.

Infinity argues that, even assuming referral sources are a protectable

legitimate business interest, Amedisys did not meet the statutory pleading

and proof requirements to enforce the restrictive covenants.

Section 542.335(1)(c) provides:

4 Other jurisdictions have recognized referral sources to be legitimate business

interests. See Charles A. Carlson & Amy E. Stoll, Business is Business:

Recognizing Referral Relationships as Legitimate Business Interests Protectable By

Restrictive Covenants in Florida, 82 Fla. B.J. 49, 52 n.42 (2008).

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A person seeking enforcement of a restrictive covenant also

shall plead and prove that the contractually specified restraint

is reasonably necessary to protect the legitimate business

interest or interests justifying the restriction. If a person

seeking enforcement of the restrictive covenant establishes

prima facie that the restraint is reasonably necessary, the

person opposing enforcement has the burden of establishing

that the contractually specified restraint is overbroad,

overlong, or otherwise not reasonably necessary to protect the

established legitimate business interest or interests. If a

contractually specified restraint is overbroad, overlong, or

otherwise not reasonably necessary to protect the legitimate

business interest or interests, a court shall modify the

restraint and grant only the relief reasonably necessary to

protect such interest or interests.

Infinity argues that Amedisys failed to prove that its business was

impacted such that enforcement of the restrictive covenants was

necessary. It asserts that Forjet had the Cleveland Clinic as a referral

source long before her employment with Amedisys, and thus Amedisys

cannot show that she gained some unfair advantage by continuing to

communicate with those long-established sources. Additionally, Infinity

argues that the referral sources for home health services cannot be

legitimate business interests because the patients have choices and

ultimately decide which company they want to use.

The record supports the trial court’s finding that Amedisys made a

sufficient evidentiary showing that enforcement of the restrictive

covenants was reasonably necessary to prevent unfair competition. Infinity

did not rebut the statutory presumption of irreparable harm and Amedisys

established by competent evidence that: (1) as an employee of Infinity,

Forjet was soliciting the same referral sources that had referred business

to Amedisys, and (2) Cleveland Clinic referrals to Amedisys declined after

Forjet left. As Amedisys points out, Infinity failed to cite any authority for

its argument that referral from a physician or case manager cannot be a

legitimate business interest merely because the patient can decline the

referral. Moreover, there is no evidence that a significant number of

patients decline referrals from their physicians and case managers. Here,

Infinity does not dispute that Amedisys suffered some harm from Forjet’s

solicitation of its referral source; it challenges only Amedisys’s failure to

show the extent of the harm.

Finally, the record evidence supports the trial court’s finding that the

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restrictive covenants at issue in this case were limited in scope and

reasonable. See Jon Juan Salon, Inc. v. Acosta, 922 So. 2d 1081, 1084

(Fla. 4th DCA 2006).

In sum, we hold that referral sources are a protectable legitimate

business interest under section 542.335, Florida Statutes. Accordingly,

we affirm the trial court’s order granting temporary injunctive relief against

Infinity and Forjet.

We hereby certify conflict with Florida Hematology & Oncology v.

Tummala, 927 So. 2d 135 (Fla. 5th DCA 2006).

Affirmed.

WARNER and CONNER, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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