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Businesses submitting licensing applications with state or local government agencies are often required to file confidential documents and financial records. The State of Florida has a broad public records policy requiring that “all state, county, and municipal records…[shall be]…open for personal inspection and copying by any person.” Florida Statute § 119.01(1). Businesses are often confronted with the challenge of protecting its trade secrets while complying with the obligation to disclose confidential information to a municipality.  Peter Mavrick is a business litigation lawyer who has extensive experience with trade secret protection.

The Florida legislature created an exemption to the public records law for trade secrets. Pursuant to Florida Statute § 815.045, businesses may identify which confidential information furnished to a state agency should be excluded from public disclosure. However, failure to identify information as putatively exempt from public disclosure effectively destroys any confidential character it might otherwise have enjoyed as a trade secret. Sepro Corporation v. Florida Department of Environmental Protection, 839 So. 2d 781 (Fla. 1st DCA 2003) (a company must label a trade secret or specify in writing as such upon delivery to a state agency to invoke the exemption from disclosure).

Even when a trade secret owner has taken the necessary precautions to label its confidential information, the risk of disclosure remains because Florida courts liberally construe the Public Records Act and favor disclosure. Christy v. Palm Beach County Sheriff’s Office, 698 So.2d 1365 (Fla. 4th DCA 1997). Designating information furnished to a government agency as confidential does not automatically render the record exempt from disclosure. Instead the information must qualify as a trade secret pursuant to Florida law. The trade secret owner also must undertake reasonable measures to protect the information from disclosure.

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A plaintiff alleging intentional discrimination must present sufficient facts to permit a jury to rule in his or her favor. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) established a burden-shifting framework to test the sufficiency of the facts in plaintiff’s discrimination claim. Under McDonnell Douglas, the plaintiff bears the initial burden of establishing a prima facie case of discrimination by showing (1) that he or she belongs to a protected class, (2) that he or she was subjected to an adverse employment action, (3) that he or she was qualified to perform the job in question, and (4) that his or her employer treated “similarly situated” employees outside her class more favorably. If the plaintiff succeeds in making out a prima facie case, the burden of proof then shifts to the defendant to articulate a legitimate, nondiscriminatory reason for its actions. If the defendant carries its burden, then the plaintiff must demonstrate that the defendant’s proffered reason was merely pretext for unlawful discrimination. Peter Mavrick is an employment lawyer who has extensive experience with defending Florida employers sued for employment discrimination.

In a previous article, the Mavrick Law Firm discussed the new federal law standard for “similarly situated” comparators decided by the federal Eleventh Circuit Court of Appeals case of Lewis v. City of Union City, Georgia, 918 F.3d 1213 (11th Cir. 2019).  As further detailed herein, Lewis v. City of Union City, Georgia helps Florida employers in their defense against baseless employment discrimination claims by imposing a heightened burden on employee plaintiffs: the federal appellate court required employee-plaintiffs to clearly articulate the “comparator” basis for the claim that allows employers to obtain dismissal early in the lawsuit instead of having to expend money in discovery to prove the claim was meritless from the very beginning.  In the words of the federal court decision, the appellate court required that the comparator analysis must take place in the plaintiff’s initial prima facie claim before the burden shifts to the employer-defendant.

The facts of the case are simple.  Jacqueline Lewis (“Lewis”) a former police officer, filed a lawsuit alleging that she was terminated based on her race, gender, and disability in violation of § 1981, Equal Protection Clause, Title VII, and Americans with Disabilities Act. The federal district court judge granted summary judgment to the defendant, concluding that Lewis’ proffered comparators did not qualify under the similarly situated standard. Lewis appealed. The Eleventh Circuit affirmed the judgment in part, reversed it in part, and remanded it to the district court. Defendant petitioned for rehearing en banc. On rehearing en banc, Lewis argued that the “similarly situated” comparison should be removed from the initial prima facie stage of the McDonnell Douglas analysis and instead moved into the latter “pretext” stage. In other words, Lewis contended she should not have to prove that her former employer treated comparators more favorably until after the former employer articulated a legitimate, nondiscriminatory reason for its termination of her employment. The Eleventh Circuit disagreed and ruled against the employee-plaintiff.

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The term ‘trade dress’ refers to the appearance of a product when that appearance is used to identify the creator of that product. Trade dress encompasses the total image of a product and may include features such as size, shape, color, texture, graphics, or particular sales techniques.” AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986). The party seeking trade dress protection bears the burden of proving that the features of the trade dress sought to be protected are not functional in nature. The functionality doctrine prevents trademark law from inhibiting legitimate competition by allowing businesses to compete through imitation of a useful product feature. Peter Mavrick is a business litigation lawyer who represents clients in trademark infringement lawsuits.

In the case of Dippin’ Dots, Inc. v. Frosty Bites Distribution, LLC, Plaintiff Dippin’ Dots, Inc. (“DDI”) sued Defendant Frosty Bites Distribution, LLC (“FBD”) for trade dress infringement of DDI’s product and logo design, in violation of the Lanham Act, 15 U.S.C. § 1125. Plaintiff DDI sold brightly-colored, small beads of ice cream called “dippin’ dots.” DDI’s dippin’ dots were created through a six-step process involving, among other things, dripping, freezing and storing an ice cream composition into beads.

FBD was secretly started by a group of retail dealers who terminated their contracts with DDI. FBD sold a competing brightly-colored, small, popcorn-shaped and spherical-shaped ice cream product called “frosty bites.” FBD’s frosty bites were created, in part, by streaming and dripping an ice cream solution into liquid nitrogen where it freezes and forms beads and clusters of frozen ice cream.

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To protect their trade secrets and other valuable confidential information, former employers have sued former employees for breach of their non-compete agreements, along with additional causes of action.  The factual basis for these additional causes of action and damages therefrom, are typically based on the same factual allegations that form the action for breach of the non-compete agreement. When the former employer fails to provide competent evidence to prove damages arising from the acts alleged in the primary cause of action, then these additional causes of action may not survive a former employee’s motion for summary judgment to obtain dismissal of the lawsuit.  Peter Mavrick has extensive experience with litigation regarding non-compete agreements and misappropriation of trade secrets and other confidential information.

In the case of Crom, LLC v. Preload, LLC, 2019 WL 1440907 (N.D. Fla. Mar. 31, 2019), Plaintiff Crom, LLC (“Crom”) filed a lawsuit against its former employee, Phuong Bacon (“Bacon”), to enforce a non-compete agreement and for damages caused by Bacon’s alleged breach of an employment contract. Crom also sued Bacon for breach of her common law duty of loyalty.  Crom sued Bacon’s subsequent employer, Preload, LLC (“Preload”), for alleged tortious interference with Crom’s business relationship with Bacon, civil conspiracy, and unfair competition. All of Crom’s claims stemmed from allegations that Bacon misappropriated trade secrets and confidential information when she went to work for Preload, Crom’s competitor. Defendants filed a motion for summary judgment to obtain dismissal of Crom’s lawsuit.

Crom built prestressed concrete tanks (“PCT”) to store liquids, most often water or wastewater. Crom’s corporate representative testified that Crom’s “internal design procedures” and expertise from a design standpoint are what distinguish Crom from other companies. Preload, the competitor involved in this lawsuit, commonly would bid against Crom for PCT design and construction projects in the Southeastern United States.  It was undisputed that there were few companies that bid for these projects. In addition to its PCT work, Preload was developing another tank design, a Liquefied Natural Gas (“LNG”) storage tank. It was undisputed that Crom did not build or design LNG tanks, and that LNG tanks are subject to a separate industry design code. Crom argued, however, that an LNG tank can be built with a PCT option, and in that instance, the code requires the LNG tank to be designed in accordance with the same specifications, which are also used in PCTs.

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A party seeking a temporary injunction to enforce a non-compete agreement must establish four elements: (1) a likelihood of irreparable harm and the unavailability of an adequate remedy at law; (2) a substantial likelihood of success on the merits; (3) the threatened injury to the petitioner outweighs any possible harm to the respondent, and (4) the granting of a temporary injunction will not disserve the public interest. Avisena, Inc. v. Santalo, 65 So. 3d 14, (Fla. 3d DCA 2011).  The party seeking the injunction has the burden of persuasion of these four elements. Peter Mavrick is a Miami non-compete lawyer who has extensive experience representing clients in non-compete litigation, including cases seeking injunctions.

In Avisena, Inc. v. Santalo, 65 So. 3d 14, (Fla. 3d DCA 2011), Avisena, Inc., (“Avisena”), i.e., the former employer, sued Alberto C. Santalo (“Santalo”), its founder and former president and chief executive officer, along with his new company CareCloud Corporation (“CareCloud”) for alleged violation of a non-compete agreement.  Santalo had previously signed an employment agreement containing non-compete covenant that prohibited competition with his former employer. Santalo’s non-compete period was conditional because it depended on whether he voluntarily quit or instead whether he was terminated and what was the basis for the employment termination.

The employment agreement articulated three reasons that Santalo’s employment may be terminated either by the Avisena or by Santalo. Subsection 5.5 of the employment agreement described termination by Avisena without cause. This subsection stated that Santalo may be terminated by Avisena for any reason or for no reason. Subsection 8.9 of the employment agreement provided varying lengths of non-compete periods depending on which of the three subsections of Section 5 applied. Subsection 8.9 provided that if Santalo were terminated without cause, then the non-compete period would be the twelve-month period following Santalo’s termination from Avisena.

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The Lanham Act does not contain a statute of limitations. When the filing of a trademark infringement lawsuit is delayed for years, the defendants may instead assert laches as an affirmative defense.  Federal courts use the limitations period for analogous state law claims as a standard for the defense of laches. Peter Mavrick is a business litigation lawyer who represents clients in unfair competition and trademark infringement lawsuits.

The laches defense requires a defendant to show 1) a delay in asserting a right or a claim, 2) that the delay was not excusable, and 3) that there was undue prejudice to the party against whom the claim is asserted.” Ares Defense Systems, Inc. v. Karras, 2016 WL 7042957 (M.D. Fla. March 10, 2016) citing AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986). In Florida, Plaintiff’s delay in asserting its trademark infringement claims is assessed against a four-year limitations period, pursuant to Florida Statute § 95.11(3). AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986). Florida Statute § 95.11(3) sets forth a four-year statute of limitations for several causes of action, including actions based on statutory liability, actions for injury to property and is also a “catch-all” limitations period for any action not specifically provided for in Florida Statutes.

A recent case examined this issue. In Ares Defense Systems, Inc. v. Karras, Plaintiff Ares Defense Systems, Inc. (“ADS”) was a firearm manufacturing company that designed, manufactured, and sold a variety of firearms and components under the marks Ares and Ares Defense since 1999.  ADS filed suit alleging trademark infringement against (among others) Defendants Double A and Lycurgan (and their president Dimitrios Karras (“Karras”)), two companies that each claimed use of the mark “Ares Armor” since 2010 or 2011.

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Florida’s Non-Competition Covenant Statute, § 542.335, permits agreements that restrain competition so long as the agreement meets certain statutory requirements.  One of the statutory requirements is that the party seeking to enforce the non-compete agreement must “plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant.” § 542.335(1)(b), Florida Statutes.  One example of a legitimate business interest that could justify a restrictive covenant, is “extraordinary or specialized training.” A restrictive covenant can bar a former employee’s advertising that extraordinary or specialized training; however, it does not necessarily bar the former employee from listing that training as biographical information. Peter Mavrick is a non-compete lawyer who frequently handles cases where enforcement of a non-compete agreement depends on whether there was “extraordinary” or “specialized” training.

A recent judicial decision issued in the First District Court of Appeal of the State of Florida demonstrates an instance where providing biological information listing that specialized training did not constitute a violation of a non-compete agreement. In Tarantola v. Henghold, 254 So.3d 1110 (Fla. 1st DCA 2018), Dr. Christina Tarantola (“Tarantola”), a dermatologist, entered into a non-compete agreement as part of her employment with the Henghold Practice (“Henghold”). The non-compete agreement restricted Tarantola’s performance of Mohs surgery within a specified geographical area for a two-year period after the termination of her employment. Dr. Tarantola resigned from Henghold in March 2015. Henghold filed a lawsuit alleging that Tarantola breached the non-compete agreement. Henghold also obtained a temporary injunction against Tarantola.

The two-year non-compete period required by the injunction was tolled from October 2015 through September 2016, because Tarantola violated the agreement by performing Mohs surgery in the restricted area. More than three years from the date of Tarantola’s resignation, Tarantola moved to terminate the temporary injunction because even with the “tolling period” extension, the two-year non-compete period had ended. Henghold opposed the motion contending that the non-compete period should be extended another five months, because of an additional violation resulting from improper advertising through Tarantola’s website that was in existence since May 2015.  Tarantola’s website provided biographical information including that she was “Mohs surgery and fellowship trained.”  The trial court determined the website constituted “advertising or marketing activity” of a restricted activity prohibited by the non-compete agreement and extended the injunction 134 days from the date of the order denying Dr. Tarantola’s motion.

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Many employers possess confidential information vital to generating profits. Employers routinely entrust employees with this information to facilitate business operations, but employees often leave their job after a few years to work for a competitor. When this happens, the employee takes the confidential information he or she learned to the next job. The employee might disclose this information to the new employer, and thereby detrimentally affect the former employer’s business. As a result, some employers competing in the same space have joined forces to combat disclosure of their confidential information by agreeing not to solicit each other’s employees, thereby ensuring the employees will remain at the same company. However, these agreements would likely constitute an unlawful restraint on trade under federal law it and may result in significant civil and criminal liability. The Mavrick Law Firm has extensive experience with non-compete agreements and related litigation.

Under the Sherman Act’s prohibition against anti-competitive behavior, an employer cannot lawfully stymie competition by entering agreements with other employers to hinder their employees’ ability to compete in the labor market. Congress declared every contract, trust, or conspiracy restraining trade or commerce illegal. 15 U.S.C. § 1 (“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States….”). The Sherman Act therefore prevents anti-competitive behavior and courts interpret this statute to prohibit competitors from agreeing not to solicit each other’s customers or fix prices. Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 458 (1993) (“The law directs itself… against conduct which unfairly tends to destroy competition itself.”); United States v. Topco Associates, Inc., 405 U.S. 596, 608 (1972) (“We think that it is clear that the restraint in this case is a horizontal one, and, therefore, a per se violation of § 1.”); Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006) (“Price-fixing agreements between two or more competitors… are per se unlawful.”). The Department of Justice has used the Sherman Act to sue several employers who agreed to refrain from competing for each other’s employees.  In one such case, the Department of Justice contended in court filings that the employers “fix[ed] and suppress[ed] employee compensation and to restrict[ed] employee mobility.” In re High–Tech Employee Litig., 856 F. Supp. 2d 1103, 1108-10 (N.D. Cal. 2012). The case settled but opened the door for employees to assert similar private causes of action. For example, in Nitsch v. DreamWorks Animation SKG Inc., an employee sued DreamWorks Animation SKG Inc., The Walt Disney Company, Lucasfilm Ltd., and others claiming they agreed to refrain from actively soliciting each other’s employees and set employee compensation ranges. Nitsch v. DreamWorks Animation SKG Inc., 100 F. Supp. 3d 851, 853 (N.D. Cal. 2015). Although the Nitsch lawsuit was resolved through arbitration, the case is problematic for employers because it sets a precedent for employees who fall within agreements between two or more employers to sue. These lawsuits could negatively affect businesses and business owners because liabilities associated with the Sherman Act can be severe. For instance, an individual can be fined up to one million dollars or imprisoned for up to ten years and a business can be fined up to one-hundred thousand dollars. 15 U.S.C. § 1. In addition, significant class action liability could arise. In re High–Tech Employee Litig., 2011-2509, ECF 1032 (granting class certification). Employers should therefore consider these risks before agreeing with another employer to inhibit employees from participating in the labor market.

Employers may avoid liability under the Sherman Act by entering bilateral employment contracts with employees that prohibit employees from disclosing confidential information. Florida law allows non-disclosure provisions within employment contracts.  Courts must enforce these provisions if they are in a signed writing; protect a legitimate business interest; and are reasonable in time, area, and line of business. Fla. Stat. § 542.335 (1) (“enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business, is not prohibited”); Fla. Stat. § 542.335 (1)(a)-(b) (“A court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought… and the person seeking enforcement of a restrictive covenant [must] plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant”). These non-disclosure employment agreements are less likely to violate the Sherman Act because they are generally considered reasonable. Alders v. Afa Corp. of Florida, 353 F. Supp. 654, 658 (S.D. Fla. 1973) (finding the employer’s restrictive covenant reasonable). In fact, non-disclosure employment agreements may further the Sherman Act’s goals of creating an efficient marketplace by securing a business’ confidential information. Consultants & Designers, Inc. v. butler Service Group, Inc., 720 F. 2d 1553, 1561 (11 Cir. 1983) (“when a practice tends to reduce competition…, but nevertheless operates to make the market more efficient… then it may still be found, under the rule of reason, to further the Sherman Act’s goals in aiding competition.”). An employer employee non-disclosure agreement therefore reduces legal exposure and is more likely to be enforced.

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It is well settled in Florida law that “an employee does not violate his duty of loyalty when he merely organizes a corporation during his employment to carry on a rival business after the expiration of his employment.” Fish v. Adams, 401 So.2d 843 (Fla. 5th DCA 1981). Absent a non-compete agreement, a former employee is free to compete against the former employer.  However, an employee who intends to leave his employment to work for a competing company or to start a competing company must avoid direct and unjustified interference with his/her employer’s business relationships. Peter Mavrick is a non-compete, employment, and business litigation lawyer who has extensive experience with defending against tortious interference lawsuits involving claims of unlawful and unfair competition.

In Harllee v. Prof’l Serv. Indus., Inc., 619 So. 2d 298, 300 (Fla. 3d DCA 1992), Professional Services Industries, Inc. (“PSI”) sued its former employee, John W. Harllee (“Harllee”) and ATEC Associates, Inc. (“ATEC”), a PSI competitor for, inter alia, tortious interference with business relationships and tortious interference with contractual relationships. PSI alleged that Harllee solicited PSI’s customers and employees before Harllee left his employment with PSI. The trial court found that there was no direct evidence that Harllee actively solicited PSI’s customers or his coworkers to work for ATEC.  However, the trial court found that Harllee’s other actions on behalf of ATEC during his employment with PSI, provided evidence of his breach of loyalty to PSI.

The trial found that in May 1987, Harlee contacted ATEC, a PSI competitor who did not have a Florida presence, and agreed to open a Florida office for them.  Harllee began preparations to open the ATEC office while still employed by PSI.  The preparations included opening a Florida bank account, orchestrating the acquisition of office space and telephone listings, and creating a development plan including an organizational chart with the names and salaries of the PSI’s employees that would be necessary to run the new ATEC office. During early June 1987, information leaked out that ATEC was about to open operations in Florida. Several PSI employees gave their resignation notices and left to work for ATEC. The trial court concluded that Harllee’s actions were disloyal and therefore actionable. The trial court entered a judgment against Harllee and ATEC for both counts of tortious interference.  Harllee and ATEC immediately appealed.

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A recent decision from the federal appellate court that decides the legal standards for employment discrimination claims in Florida federal courts made it much easier for employers to defend against employment discrimination lawsuits.  Under federal law, a plaintiff’s burden in an intentional-discrimination claim includes the burden to present evidence of other individuals who are “similarly situated”, i.e. “comparators”. The Eleventh Circuit Court of Appeals has historically interpreted the term “similarly situated” in divergent ways, causing uncertainty as to the application of that standard. In its recent decision in Lewis v. City of Union City, Georgia, 918 F.3d 1213 (11th Cir. 2019), the Eleventh Circuit clarified the standard for comparator evidence in intentional-discrimination cases as “similarly situated in all material respects.” Peter Mavrick is a Florida employment lawyer who defends businesses and management against employment discrimination lawsuits as well as claims alleging discrimination that are filed with the Equal Employment Opportunity Commission (EEOC) and the Florida Commission on Human Relations.

In Lewis v. City of Union City, Georgia, Jacqueline Lewis (“Lewis”), an African-American female police detective, returned to work after a heart attack in 2009.  Lewis was cleared to work without restrictions. In 2010, the Police Chief announced a new policy requiring all officers to carry Tasers. The new policy required training in which officers had to receive a five-second Taser shock. Lewis feared being injured because of her earlier heart attack. Lewis’s doctor described her condition as “several chronic conditions including a heart condition,” and recommended that Lewis should have a Taser or pepper spray be used either “on or near” her. Lewis informed the Police Chief of her doctor’s recommendation.

Under the new policy, Lewis would inevitably be “near” pepper spray and tasers.  The Police Chief concluded that the restrictions described by Lewis’s doctor prevented her from performing the essential duties of her job. Lewis was placed on unpaid administrative leave until her doctor released her to return to full and active duty. Lewis was instructed to complete the necessary FMLA paperwork concerning her absence and told that she could use her accrued paid leave until it was expended. Lewis exhausted all of her accrued leave but did not complete the FMLA paperwork. As a result, her absence was deemed unapproved and she was terminated pursuant to police policy on unapproved absences.

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