by Peter R. Ulanowicz
Woe be unto the lawyer who dares file the tortious interference claim against another attorney; for he or she shall surely suffer the wrath of a thousand §57.105 motions!
Filing any suit against an attorney or a law firm is always a daring move for a plaintiff; with the buffer between defendant and opposing counsel removed, the often cordial, “respectful opposition” mindset between counsel typically vanishes. It’s now personal, and given that a law firm defendant doesn’t have to concern itself with billing invoices, chances are that every roadblock in the book will be thrown in the hopes of derailing the suit.
In the specific context of a tortious interference claim based on a noncompete sent to an employer, both the former employer and the law firm would be named defendants, and naturally the potential for a conflict of interest exists. It would then be up to the defendant law firm to consider whether it could still provide competent and diligent representation to its client, that the representation is not prohibited by law, that no adverse positions between the firm and client exist that would have to be asserted before the court, and that client has given its informed consent to the representation.1 If there are any issues as to any one of these factors, the law firm should consider withdrawing its representation of the former employer.
Notwithstanding the holdings of SCI Funeral Services of Florida, Inc. v. Henry, 839 So. 2d 702 (Fla. 3d DCA 2002), and North Star Capital Acquisitions, LLC v. Krig, 611 F. Supp. 2d 1324 (M.D. Fla. 2009), as discussed in part one of this article, a defendant law firm named in a tortious interference suit will almost certainly raise the issue of litigation privilege as a defense. The concept of litigation privilege was best described by the Florida Supreme Court in the 2007 case Echevarria, McCalla, Raymer, Barrett & Frappier v. Cole, 950 So. 2d 380, 383 (Fla. 2007): “[T]he principle of the litigation privilege in Florida, essentially providing legal immunity for actions that occur in judicial proceedings.” Echevarria extended litigation privilege immunity to all torts in Florida, including tortious interference.2 Other courts have followed Echevarria in prohibiting tortious interference claims based on actions occurring during the course of judicial proceedings.3
But for all that Echevarria does say regarding litigation privilege, what is most important is what it doesn’t say. Echevarria applies to actions that occur within the course of judicial proceedings; it says nothing as to actions that arise before a suit is filed, which includes “cease and desist” letters typically sent to former employees — and sometimes their new employers — alleging violations of restrictive covenants. Indeed, at least two recent Florida cases subsequent to Echevarria have expressly refused to extend litigation immunity to situations involving presuit demand letters.
In Trent v. Mortgage Electronic Registration Systems, Inc., 618 F. Supp. 2d 1356 (M.D. Fla. 2007), the Middle District was faced with a situation similar to that of North Star when mortgagors alleged that a mortgagee had violated the FCCPA by sending them pre-foreclosure letters knowing that it was not a creditor entitled to collect debts.4 The mortgagee alleged that these demand letters were protected by litigation privilege, but the Middle District begged to differ. The Trent court asked — and then answered — a critical question:
Does a pre-suit communication . . . likewise fall within the ambit of the litigation privilege? This the Echevarria majority does not answer and, in fact, expressly declines to address . . . . After detailed review of the Echevarria decision and the unsettled state of Florida law on this issue, this Court is unprepared to extend the litigation privilege to pre-suit communications especially where, as here, the parties agree that the law does not require that these notices be sent.5
Considering Trent in the context of presuit communications to an employer concerning its employee’s purported restrictive covenant with a former employer, it is notable that nothing within §542.335 requires a former employer to send any such correspondence prior to filing suit. Thus, a court citing Trent would likely deny a claim of litigation privilege in such circumstances.
Two years later, the Southern District of Florida considered a summary judgment motion in Kelly v. Palmer, Reifler & Associates, P.A., 681 F. Supp. 2d 1356 (S.D. Fla. 2009). The defendant in Kelly was a law firm that had sent civil theft demand letters on behalf of J.C. Penney.6 The recipients of these letters sued the firm for RICO violations, unjust enrichment, money had and money received, and violation of Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA).7 Citing to Echevarria, the defendant argued that these letters were protected by absolute litigation privilege.8 The Southern District found such reliance to be misguided, noting there remained questions “whether the demand letters were truly intended as a condition precedent to filing suit …or, as Plaintiffs argue, whether they were sent merely as a ‘scare tactic.’”9 By holding the question as an issue of fact as to “the firm’s good faith in sending demand letters,”10 Kelly could be utilized as a case to defeat a defendant law firm’s motion for summary judgment and/or to raise issues of the defendant’s motive in cases involving tortious interference and restrictive covenants.11
But what about practical matters that might arise during this type of action, such as discovery? An attempt to sit down a representative of a defendant law firm for deposition might be met with a motion for protective order by the firm, but courts should be cautious not to be overly swayed by arguments of privilege.
One advantage that a plaintiff employee would have is that the defendant law firm would be a named party to the action, and, thus, unmistakably would be considered a material witness to the tortious interference claim. The Florida Rules of Civil Procedure expressly establish the right of a party to take the deposition of any person, “including a party.”12 Florida courts found that protective orders that prohibit the depositions of material witnesses, including parties named to the action, constitute irreparable harm and are grounds for an interlocutory appeal.13
The key subject of a deposition of a defendant law firm representative would be neither the firm’s conversations with its clients (protected under attorney-client privilege), nor internalized documentation or notes of attorney mental impressions (protected under work product privilege), but rather communications being made to third parties, in this case a former employee’s new employer. Trent and Kelly have demonstrated Florida courts’ refusals to extend litigation privilege to presuit communications, thus, there would be no remaining privilege to prohibit an inquiry into the extent of these communications by an attorney to a plaintiff’s new employer.
Regardless of whether a party’s attorney is a named party to an action, Florida courts have found time after time that protective orders that prohibit that attorney’s deposition in its entirety is overbroad;14 questioning of the attorney on relevant, nonprivileged matters should be allowed. Thus, although a protective order that prohibits inquiry into attorney-client or work product privileged matters may be understandable, courts should reject the proposition that a deposition of a defendant law firm representative in a tortious interference action should not be allowed to occur at all.
Developments in case law over the past two decades have given hope to employees who may previously have sat by helplessly and watched former employers threaten their new employers with litigation over an unenforceable noncompete agreement. This is not to say raising a tortious interference claim in such a situation would necessarily be a walk in the park. The new and relatively unknown nature of the cases authorizing this cause of action no doubt will make such a case a target for a defense attorney’s labels of “frivolous litigation” and impassioned pleas for litigation privilege immunity. However, an educated employee’s attorney should be prepared to cite to the presiding judge the case law that has expressly rejected the litigation immunity defense and recognized that an employee who has been harmed by a former employer’s tortious actions should be entitled to relief.
Moreover, courts should not be afraid to hold accountable attorneys who willingly play a role in such tortious behavior with full knowledge of a lack of legal support for their clients’ restrictive covenants. The Florida Bar has encouraged lawyers to “help the bar regulate itself in the public interest.”15 While court sanctions may adequately exist to address lawyer’s actions occurring during the course of judicial proceedings — including the raising of frivolous claims and defenses — an attorney’s improper actions occurring before a suit is filed often remain unpunished. At least in the narrow context of employer restrictive covenants, filing a tortious interference claim against a participating attorney who wrongfully causes an employee to be terminated is one way to advance the bar’s duty of self-regulation.
It is quite likely that employer restrictive covenants, including noncompete and nonsolicitation agreements, will remain the law of the land in Florida for the foreseeable future. Courts will undoubtedly continue to enforce such covenants upon an employer’s showing of a legitimate business interest and reasonable restrictions. However, employees and their new employers should not be subjected to intimidation from former employers and their counsel in situations where the restrictive covenants fail to abide by the law. Tortious interference claims — already recognized by the courts in these scenarios — give employees the means to fight back against such behavior.
1 See Rules Reg. The Fla. Bar 4-1.7(b) (2010).
2 Echevarria, 950 So. 2d at 384.
3 See Fernandez v. Haber & Ganguzza, LLP, 30 So. 3d 644 (Fla. 3d D.C.A. 2010).
4 Trent, 618 F. Supp. 2d at 1357-58.
5 Id. at 1360.
6 Kelly, 681 F. Supp. 2d at 1361.
7 Id. at 1363.
8 Id. at 1367.
9 Id. at 1369.
11 Kelly also expressly holds that attorneys acting on behalf of clients are not exempt from liability for the purposes of the FDUTPA. Id. at 1371-72.
12 See Fla. R. Civ. P. 1.310(a) (2010).
13 See, e.g., Expert Installation Service, Inc. v. Fuerte, 933 So.2d 1231 (Fla. 3d D.C.A. 2006); Sabol v. Bennett, 672 So. 2d 93, 94 (Fla. 3d D.C.A. 1996).
14 See, e.g., Young, Stern & Tannenbaum v. Smith, 416 So. 2d 4 (Fla. 3d D.C.A. 1982); Marbalk Shipping v. Bhagat, 948 So. 2d 931 (Fla. 3d D.C.A. 2007); Melbourne v. A.T.S. Melbourne, Inc., 475 So.2d 270 (Fla. 5th D.C.A. 1985); Spector v. Alter, 138 So. 2d 517 (Fla. 3d D.C.A. 1962).
15 In re Amendments to the Rules Regulating The Florida Bar, 933 So. 2d 417, 421 (Fla. 2006).
Peter R. Ulanowicz is an associate attorney with the law offices of Donna M. Ballman, P.A., located in Ft. Lauderdale. He specializes exclusively in the area of labor and employment law. Mr. Ulanowicz was admitted to The Florida Bar in 2005.
This column is submitted on behalf of the Labor and Employment Law Section, Jill Steinberg Schwartz, chair, and Frank E. Brown, editor.