*Co-authored by Charles LeCocq
Pokémon Go is the newest craze to hit smartphones, finding colossal success in America. Some estimates claim that five percent of all android users had installed the game on their phones within one week of launch. Nintendo’s stock is surging, with the firm’s market value increasing by $7.5 billion in one week. The Pokémon Go app encourages people to get out and about, to explore and see new places, to “go.” With all of these users on the go, how does an employer encourage its best employees to stay?
Florida law statutorily protects free trade. As a result, in the absence of a properly drafted non-competition agreement that meets specific criteria, Florida law will not allow an employer to restrict the future employment of a departing employee. On the other hand, Florida law allows “valid restraints of trade” in which an employer and an employee can agree in a signed writing on post-employment restrictions. These agreements require that the employer demonstrate a protectable interest in restricting the post-employment activities. Florida non-competition agreements also require a reasonable restriction on the geographic area. The statute itself sets forth additional time frames it deems reasonable depending on the level of the departing employee and that employee’s access to protected or confidential information.
Many states, however, have recently started tightening the reins on non-competition agreements. In Massachusetts, for example, state representatives voted unanimously in late June to reform state non-competition law. The state added a “garden leave” clause, requiring employers to pay a half-salary to any former employee unable to work due to a non-competition agreement. The rationale is that state representatives are worried about losing potential industry to states like California, where Courts generally refuse to enforce non-competition agreements.
Because Florida law favors free competition, Courts strictly construe non-competition agreements. A recent Florida federal court, for example, rejected a non-competition agreement, holding that the former employer failed to establish a business interest worthy of protection. IDMWORKS, LLC v. Pophaly, — F. Supp. 3d — at *4 (S.D. Fla. June 23, 2016). In IDMWORKS, the Court held that although the former employee breached his non-competition agreement, the former employer failed to show that the agreement was reasonably necessary to protect a legitimate business interest. Id. The former employer, seeking injunctive relief from the court, argued that it had a legitimate business interest in the training it provided to employees. Id. at 7. The court noted that an employer under certain circumstances can protect its training methods as a legitimate business interest “only when the training rises to the level of being specialized or extraordinary.” Id. The court reasoned that having the defendant attend a seminar and providing him with access to a database of Oracle training materials did not constitute extraordinary or specialized training. This was especially true because competitors had access to the same databases. Id. The court denied the preliminary injunction, holding that the LLC’s training was typical of the industry. Id.
So what must an employer do when skilled employees wish to go explore other business interests, like intrepid Pokémon Goers heading off to find new places and adventures? After all, surely the Pokémon Company, Nintendo, and the programmer company, Niantic, want to keep the talented programmers and others involved with this recent success. Florida employers have the legal ability to validly restrict key employees from post-employment opportunities in order to protect legitimate business interests. However, questions remain. What criteria will a Florida court use to determine when training is “specialized and extraordinary” enough to protect? What is “typical” in an industry, and thus not worthy of protection. Will all courts protect customer lists and databases?
Some of you are reading this article on your mobile device looking for Pokémon Go balls or trying to capture a Pokémon. Even if you’re not, there is a good possibility that some of your employees are using otherwise valuable time to play Pokémon Go. If it’s your intention to keep these Pokémon Go-playing folks or any of your (perhaps more productive) employees at your company long-term, then we suggest that you seek competent legal counsel to draft carefully-constructed non-competition agreements. In a perfect scenario, you might just find Pokémon Go, but Employee Stay.
**LeCocq is a 2016 Summer Associate in the Orlando office of Burr & Forman LLP. He is a law student at Florida State University College of Law.