Florida’s Fourth District Court of Appeal addressed an emerging jurisdictional phenomenon on Wednesday. Can a national company bring suit in its home state against telecommuting employees from other jurisdictions?
The question proved pivotal when Fort Lauderdale-based tech company Citrix Systems Inc. sued seven former employees who worked from North Carolina. It is yet to be definitively answered, but the court ruled that a forum-selection clause wasn’t enough to establish personal jurisdiction in Florida — an issue the court said is becoming “an increasingly common factual scenario” as local companies grow their digital footprint and increasingly employ out-of-state staff.
The burden of proving personal jurisdiction will fall to the plaintiff, according to the opinion, written by Fourth DCA Judge Robert M. Gross, with Judges Dorian K. Damoorgian and Alan O. Forst concurring.
Citrix sued the seven out-of-state sales representatives in 2017 when they left to work for Egnyte Inc., a tech company based in California.
The complaint accused the group — Matthew Ware, Jessica Bell, Tereza Landrum, Caroline Wells, Calli Pastor, James Jacobs and Jesse Campbell —of misappropriating trade secrets and breaching their contract with Citrix, which included a covenant not to compete.
Citrix argued that by entering into an employment agreement, the defendants had consented to a forum-selection clause. The company does business in Florida, not North Carolina, and claimed the alleged tortious damage was caused in Florida.
But the former employees moved to dismiss, challenging Florida’s personal jurisdiction over them. Their arguments failed to convince Broward Chief Judge Jack Tuter, who denied the motion without holding an evidentiary hearing.
The appellate judges disagreed, and sent the case back to the trial court to decide whether the employees’ Florida ties are strong enough to keep the case alive.
Read the court order:
The lawsuit’s future hinges on two conflicting affidavits.
One affidavit, signed by the ex-employees, played down their Florida connection, claiming in-person meetings in Florida were few and far between and that supervision was minimal. According to the court opinion, the appellants denied having any regular video or teleconferences with Citrix.
But Citrix’ affidavit told a different story. It claimed Florida bosses kept direct tabs on their North Carolina employees, scheduling regular training sessions and sales calls.
The defendants also had access to Citrix’s servers and other IT resources, which were kept in Florida, according to the opinion.
The employees’ lawyers, James A. Gale, Samuel A. Lewis and David M. Stahl of Cozen O’Connor in Miami, declined to comment on the case. And counsel to Citrix, April Boyer and Yamilet Hurtado of K&L Gates in Miami, did not respond to requests for comment before deadline.
The opinion referenced a two-step analysis in its decision, based on a Florida Supreme Court case from 1989, in which an out-of-state employee objected to personal jurisdiction. In Venetian Salami Co. v. Parthenais, it became the plaintiff’s responsibility to prove jurisdiction.
The case will return to the Broward Circuit Court for a jurisdictional hearing.