DO YOU HAVE A FLORIDA’S DECEPTIVE AND UNFAIR TRADE PRACTICES ACT CLAIM

In previous articles, I discussed Florida’s Deceptive and Unfair Trade Practices Act referred to as “FDUTPA”…but, it has been awhile.  (For more information on FDUTPA, check here and here.)  Now is as good of a time as any to discuss it again because FDUTPA provides a private cause of action and, perhaps, there may be a consideration as to whether such claim can be (or is) properly asserted in the context of your circumstances.

FDUTPA is a statutory scheme designed, “To protect the consuming public and legitimate business enterprises from those who engage in unfair methods of competition, or unconscionable, deceptive or unfair acts or practices in the conduct of any trade or commerce.”  Fla. Stat. s. 501.201(2).   In doing so, FDUTPA authorizes three avenues of legal recourse against an offending party:  “(1) declaratory relief; (2) injunctive relief; and (3) [monetary] damages.”   Webber v. Bactes Imaging Solutions, Inc., 45 Fla. L. Weekly D125a (Fla. 2d DCA 2020);Fla. Stat. s. 501.211.

An unfair practice is ‘one that “offends established public policy” and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’”  Webber, supra, (citation omitted).

A deceptive practice is one that is ‘likely to mislead’ consumers.” Webber, supra, n.6 (citation omitted).

By way of example, even though this is not a construction dispute, in Webber, the plaintiff pursued a FDUTPA claim seeking declaratory relief, injunctive relief, and damages — the three avenues of relief the statute provides.  The plaintiff claimed that the defendant overcharged for copies of medical records when the request for records was made by a patient’s lawyer versus the patient directly.  The defendant charged for copies $1 per page after the first 25 pages when the request for medical records was made by the patient’s lawyer.  The plaintiff claimed this violated law that set the maximum rate at $.25 per page for patients who request such records.  The defendant countered that it was able to charge higher because the request was made by a lawyer, an “other entity,”  instead of the patient directly.  The trial court found no FDUTPA violation occurred.   The Second District Court of Appeal reversed finding differently:

We conclude that [defendant’s] conduct in charging the “other entities” rate when a lawyer submits a request for copies of medical records on behalf of his or her client, the patient, is an unfair act or practice…. The only way the patient — who is being represented by legal counsel — can obtain his or her records is to either pay the “other entities” rate merely because the medical records request was submitted by his or her lawyer or for the patient to submit a separate medical records request directly to the practitioner. But [defendant] has already been instructed by the trial court that its policy of charging the “other entities” [higher] rate in such circumstances violates rule 64B8-10.003. And requiring a patient to jump over an additional hurdle to obtain his or her own medical records — where that patient has already signed a release indicating that the patient gives express permission for the records to be released to the lawyer — is a practice that we construe to be offensive to public policy. We likewise conclude that it is “oppressive, unscrupulous or substantially injurious to consumers” where a party frustrates patient access to medical records by charging higher than permissible rates for copies despite already being instructed that it was not permitted to do so.

Webber, supra.

Clearly, the actual facts here are not construction-related.  But do the facts, or the finding that the facts constituted an “unfair trade practice” under FDUTPA, give you a basis that a FDUTPA claim applies to the facts in your case, or conversely, should not apply?  Although the Second District did not need to decide whether the facts also constituted a deceptive practice, it footnoted that the facts likely did rise up to a deceptive practice.  Webber, supra, n.6.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

REFERRAL SOURCES CAN CONSTITUTE LEGITIMATE BUSINESS INTEREST TO SUPPORT NON-COMPETE AGREEMENT


I previously discussed the validity of non-compete agreements as well as tips for drafting such agreements.

Recently, in Infinity Home Care, L.L.C. v. Amedisys Holding, LLC, 40 Fla.L.Weekly D1929a (Fla. 4th DCA 2015), the Fourth District Court of Appeal discussed the requirement of a “legitimate business interest” pursuant to Florida Statute s. 542.335, which governs the enforcement of non-compete agreements. Specifically, the court was looking at whether referral sources constitute a legitimate business interest.  The reason being is that there needs to be a legitimate business interest to enforce a restrictive covenant such as a non-compete agreement.  The statute gives examples of legitimate business interests (e.g., trade secrets, confidential business information that does not qualify as trade secrets, substantial relationships with specific prospective or existing customers, patients or clients, etc.) but is NOT limited to the criteria or examples set forth in the statute.  See Fla.Stat. 542.335(1)(b) (“the term ‘legitimate business interest’ includes, but is not limited to:…”).

 

As it pertains to what constitutes a legitimate business interest, the Fourth District held:

 

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.

***

In sum, we hold that referral sources are a protectable legitimate business interest under section 542.335, Florida Statutes.

Infinity Home Care, supra.

 

If you are drafting or enforcing a non-compete agreement, it is important to consult with counsel.  This way your legitimate business interests can appropriately be protected as you move to enforce the non-compete agreement—the restrictive covenant—by moving for injunctive relief.  This case, however, supports the argument that the legitimate business is broader than the criteria and examples in the statute and based on the business’s “plans, strategies, and relationships.” 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.