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Florida businesses may seek rescission of a contract in certain circumstances when the contract was entered into because of fraud, accident, or a mistake of facts.  To preserve the legal right to invoke the remedy of rescission, when the basis for rescission is discover must immediately reject any further benefits under the contract and must usually offer to restore the other party to the same position that it was in prior to entering into the contract. Peter Mavrick is a Fort Lauderdale business litigation attorney, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

After entering into a contract, a Florida business may discover something that reveals that it was a mistake to enter into the contract.  “Courts of equity will rescind an instrument based upon fraud, accident[,] or mistake.”  Bass v. Farish, 616 So. 2d 1146 (Fla. 4th DCA 1993).  Rescission allows a business to essentially undo a contract.  The remedy of rescission allows a Florida business to return to the same position it was in before entering into the contract in certain circumstances.  “The prime object of rescission is ‘to undo the original transaction and restore the former status’ of the parties.”  Billian v. Mobil Corp., 710 So. 2d 984 (Fla. 4th DCA 1998).

Under Florida law, a business cannot receive the benefit of a contract while simultaneously repudiating that same contract.  A party to a contract can waive its right to rescission if it “retains the benefits of a contract after discovering the grounds for rescission.” Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So. 2d 306 (Fla. 2000).  To obtain rescission, a party to a contract must show that it, “with reasonable promptness, denied the contract as binding upon him and that thereafter he was consistent in his course of disavowal of it.”  Rood Co. v. Board of Pub. Instruction, 102 So.2d 139 (Fla.1958); Steinberg v. Bay Terrace Apartment Hotel, Inc.,375 So.2d 1089 (Fla. 3d DCA 1979) (“[T]he remedy of rescission is clearly not favored by the courts, particularly when the complaining party has failed to promptly deny the contract as binding upon him and failed to follow a course of conduct manifesting a disavowal of it”).  By staying silent or acting as if the contract is still in effect, the party seeking rescission “will be bound by the contract in the same manner as if the [basis for rescission] had not occurred.” Rood Co. v. Board of Pub. Instruction, 102 So.2d 139 (Fla.1958).  AVVA-BC, LLC v. Amiel, 25 So. 3d 7 (Fla. 3d DCA 2009) (refusing rescission when purchase of business where landlord did not accept assignment but the business continued to operate).

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Trade secrets and confidential information can lose protection under the Florida Uniform Trade Secrets Act (FUTSA) when they are disclosed to third parties. One way to maintain protection of this information under FUTSA, is by entering into a confidentiality agreement with the third parties that will receive the information.  When trade secrets or confidential information is disclosed to employees without a confidentiality agreement, the information does not necessarily lose trade secret protection.  Peter Mavrick is a Miami business litigation lawyer who represents clients in trade secret litigation in Miami, Fort Lauderdale, Boca Raton, and Palm Beach.

A company seeking to protect its confidential information under FUTSA must show that the confidential information at issue was “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”  See § 688.002(4)(b), Florida Statutes.  Disclosing information to third parties can defeat the requisite element of secrecy under either FUTSA when the party given the confidential information is not informed of the confidential nature of the information or otherwise has no obligation to keep the information confidential. “Disclosing the ‘information to others who are under no obligation to protect the confidentiality of the information defeats any claim that the information is a trade secret.’” M.C. Dean, Inc. v. City of Miami Beach, Florida, 199 F. Supp. 3d 1349 (S.D. Fla. 2016).  The underlying principle behind this rule is that something cannot be a trade secret if it is freely shared with outsiders.

“This necessary element of secrecy is not lost, however, if the holder of the trade secret reveals the trade secret to another ‘in confidence, and under an implied obligation not to use or disclose it.’”  Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974); see Advantor Sys. Corp. v. DRS Tech. Services, Inc., 678 Fed. Appx. 839 (11th Cir. 2017) (“[T]rade secret protection is not lost when a company shares its trade secrets with an entity that has a duty to maintain the secrecy or limit access to the disclosed document”).

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The Florida Deceptive and Unfair Trade Practices Act (FDUTPA) provides a means for customers to sue a business which deceptively charges additional fees.  When a business conducts itself in an unlawful, unfair, or deceptive manner to its own customers, the business’ competitor may also assert a FDUTPA claim for the harm that these practices indirectly cause. Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

FDUTPA is a Florida statute that permits litigants to sue if they were damaged from “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.”  § 501.204, Florida Statutes. “An unfair practice is ‘one that ‘offends established public policy’ and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’” PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773 (Fla. 2003).  “[D]eception occurs if there is a ‘representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment.” Millennium Communications & Fulfillment, Inc. v. Office of the Attorney Gen., 761 So.2d 1256 (Fla. 3d DCA 2000).  “A deceptive or unfair trade practice constitutes a somewhat unique tortious act because, although it is similar to a claim of fraud, it is different in that, unlike fraud, a party asserting a deceptive trade practice claim need not show actual reliance on the representation or omission at issue.”  State, Office of Attorney Gen., Dept. of Legal Affairs v. Commerce Commercial Leasing, LLC, 946 So. 2d 1253 (Fla. 1st DCA 2007).  “The issue when considering a claim under the Act is whether the alleged practice was ‘likely to deceive a consumer acting reasonably in the same circumstances.’”  Id. 

One type of potentially deceptive practice is “pass-through” charges.  Florida businesses will often apply separate charges in addition to the agreed upon price at the point of sale or in an invoice, or otherwise disguise the basis for a charge.  Sales tax is the most common pass-through charge, but a business can charge the customer for nearly any expense.  There is nothing inherently unlawful about these types of charges; however, the charge must be accurately presented to the consumer and not otherwise be contrary to the parties’ contract.   An example of a deceptive practice may be when businesses portray fabricated charges as pass-through business expenses, but then keep the monies for themselves.  E.g. Bowe v. Pub. Storage, 1:14-CV-21559-UU, 2014 WL 12029270 (S.D. Fla. July 2, 2014) (finding that it is a violation of FDUTPA for a company to portray an insurance charge as if it was being sent to the insurer, when in fact much of it was being retained).  Such charges can trick consumers into believing that the price of a product or service is lower than what it truly is or that the additional charges are universally incurred in the industry like a tax.

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Separation agreements commonly include releases of liability for employers and employees to avoid litigation for any claims that may have been asserted by either party. The presence of a release in the separation agreement does not necessarily relieve the employee of non-compete, non-solicitation, and confidentiality clauses from a prior agreement. Peter Mavrick is a Fort Lauderdale non-compete attorney and business litigation attorney who has substantial experience with non-compete litigation, including injunction proceedings.  The Mavrick Law Firm also represents clients in non-compete litigation and business litigation in Miami, Boca Raton, and Palm Beach.

An example of this occurred in the recent case of Accuform Mfg., Inc. v. Nat’l Marker Co., 8:19-CV-2220-T-33AEP, 2020 WL 1674577 (M.D. Fla. Jan. 13, 2020), report and recommendation adopted, 8:19-CV-2220-T-33AEP, 2020 WL 634416 (M.D. Fla. Feb. 11, 2020). Accuform Manufacturing Inc. (“Accuform”) entered an employment agreement with Bradford Montgomery (“Montgomery”), Peter Bloniarz (“Bloniarz”), John Donati (“Donati”), Rebecca Longo (“Longo”) (collectively “Defendants”). The employment agreement contained non-competition, non-solicitation, and confidentiality clauses.  Accuform was later acquired by Justrite Manufacturing Company, LLC (“Justrite”). The acquisition resulted in consolidation of several departments which eliminated many jobs at the company. Accuform gave Montgomery, Bloniarz, and Donati a choice to assume a new role at Justrite or sign a separation agreement (“Separation Agreement”). Montgomery, Bloniarz, and Donati departed from Accuform and signed a Separation Agreement.

The terms of the Separation Agreement detailed certain benefits in exchange for the release of any claims against Accuform. Defendants were then hired by National Marker Company (“National Marker”), a competitor of Accuform. Accuform filed a lawsuit and a motion for a preliminary injunction against the Defendants for violation of the non-compete, non-solicitation, and confidentiality clauses. Accuform argued that preliminary injunctive relief was necessary because (a) Montgomery, Bloniarz, and Longo solicited and continued to solicit Accuform customers in violation of the employment agreements; (b) Montgomery, Bloniarz, Longo and Donati, breached and continued to breach the employment agreements by soliciting current Accuform employees to work for National Marker; and (c) all Defendants misappropriated, disclosed, and used Accuform’s confidential business information and continued to do so in violation of the confidentiality clauses of the employment agreements.

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For an employer to be liable for retaliation under Title VII of the Civil Rights Act of 1964 (Title VII), the employee must show the adverse action (the decision to terminate) was made because of the employee’s protected activity (the submission of discrimination complaint).  Employers may prevail against these retaliation claims by showing that the particular individual who made the decision to terminate was not personally aware of the protected activity.  Peter Mavrick is Fort Lauderdale employment attorney with extensive experience in defending businesses and their owners against claims alleging employment discrimination, retaliation, and unpaid wages.  The Mavrick Law Firm also defends the interests of employers in Miami, Boca Raton, and Palm Beach.

An employee claiming that he or she was unlawfully fired in retaliation for filing a discrimination complaint under Title VII must show that the termination was a result of a protected activity, such as a discrimination complaint.  Particularly, “a plaintiff must show: (1) that she engaged in an activity protected under Title VII; (2) she suffered a materially adverse action; and (3) there was a causal connection between the protected activity and the adverse action.”  Kidd v. Mando Am. Corp., 731 F.3d 1196 (11th Cir. 2013).  To establish the requirement of a causal connection, a plaintiff-employee must show that the relevant decisionmaker was “aware of the protected conduct, and that the protected activity and the adverse actions were not wholly unrelated.” Shannon v. Bellsouth Telecomm., Inc., 292 F.3d 712 (11th Cir.2002); Univ. of Texas Sw. Med. Ctr. v. Nassar, 570 U.S. 338 (2013) (finding that an employee-plaintiff must show that the adverse action would not have occurred without the protected complaint)

Because it can sometimes be difficult to determine the motivating cause for a decision-maker’s adverse action, courts may infer that the protected activity caused the adverse action when the adverse action occurs soon after the protected activity.   Bechtel Const. Co. v. Sec’y of Labor, 50 F.3d 926 (11th Cir. 1995) (“Proximity in time is sufficient to raise an inference of causation”).  Courts will permit plaintiffs to demonstrate causation “by showing close temporal proximity between the statutorily protected activity and the adverse employment action.” Thomas v. Cooper Lighting, Inc., 506 F.3d 1361 (11th Cir. 2007).  “[A]n employee’s termination within days … of his protected activity can be circumstantial evidence of a causal connection between the two.” Jefferson v. Sewon Am., Inc., 891 F.3d 911 (11th Cir. 2018).

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Another article discusses how a business can lawfully sue a competitor under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) when the competitor issues deceptive charges against its own customers.  Several recent cases have explained that whether a charge is unlawfully deceptive is highly dependent on the exact language of the charge.  Minor nuances as to the way a charge is phrased can make the difference between conduct that is unlawfully deceptive under FDUTPA and conduct which is legitimate and lawful.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and also represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

A company may violate FDUTPA by issuing charges to its customers which deceptively appear to be taxes or fees that are being passed to the customer.  Charges such a service charges, filing fees, and sales tax may properly be passed to the customer as long as those charges accurately reflect what they are for and paid for that purpose.  As an example, a company may not charge a customer for a sales tax when the product or service purchased is not actually subject to sales tax.

Generally, a company cannot portray a charge as being a pass-through expense when the moneys paid are being retained by the company.   Latman v. Costa Cruise Lines, N.V., 758 So. 2d 699 (Fla. 3d DCA 2000) (“We […] conclude that where the cruise line bills the passenger for port charges but keeps part of the money for itself, that is a deceptive practice under FDUTPA.  Reliance and damages are sufficiently shown by the fact that the passenger parted with money for what should have been a ‘pass-through’ port charge, but the cruise line kept the money”);  Harrison v. Lee Auto Holdings, Inc., 45 Fla. L. Weekly D1038 (Fla. 1st DCA Apr. 29, 2020) (finding that charging a fee which appears to be a fee paid to the government, when some of that money was in fact retained as profit, is unlawful).

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Companies are fictional entities that can only act through their agents. So logically, if a company is bound by a non-compete agreement, then it may also be enforced against the company’s officers. In other words, if a signatory company’s officer opens up a new company for the purpose of competing in a way that violates the non-compete agreement, then both the officer and the new company may be enjoined. Peter Mavrick is a Miami non-compete attorney and business litigation attorney who has substantial experience with non-compete litigation, including injunction proceedings.  The Mavrick Law Firm also represents clients in non-compete litigation and business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.

As example of this circumstance occurred in Sexual MD Sols., LLC v. Wolff, 20-20824-CIV, 2020 WL 2197868 (S.D. Fla. May 6, 2020). Sexual MD Solutions, LLC (“SMDS”), a marketing company, was founded by Mark White (“White”). Mr. White devoted a substantial amount of time and money to develop the GAINSWave program. The purpose of GAINSWave program was to market a high-frequency, low intensity shock wave therapy (“ESWT”) to the medical community. SMDS developed training courses for physicians and physicians’ assistant groups to provide training in the treatment, but more importantly in the sales, marketing and operational aspects of selling the treatment. The trade secrets and confidential information developed by SMDS included opportunity analyses, marketing techniques, sales strategies, comparison data, pipelines, lead-generation strategies, customer/client lists and data, business plans and training videos.

SMDS hired key influencers to promote the treatment and bought certain key words that would cause its advertisements to feature prominently in internet searches. The promotion drove potential clients to the website, where consumers could find a local provider that offered the treatment. Providers who paid SMDS a monthly subscription were listed on the website. The more traffic the website received, the more valuable the SMDS subscription became. SMDS required physicians and physician’s assistants who wanted access to SMDS’ proprietary information to sign a confidentiality and non-compete agreement (“SDMS Agreement”). Medical providers who signed the SDMS Agreement and paid a monthly fee, were given access to SMDS’s Portal. SMDS’ Portal contains all materials related to SMDS’s proprietary methods, the turnkey business strategies and the contents of the business.

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Employees who are terminated because of their poor performance or conduct sometimes accuse their former employers of employment discrimination.  Employment discrimination claims can be based on a variety of “protected categories,” such as race, national origin, sex, or age discrimination. Such claims are most commonly asserted under federal law (such as Title VII of the Civil Rights Act of 1964 or the Age Discrimination in Employment Act) or under Florida law (under the Florida Civil Rights Act of 1992).  Courts, however, have placed important safeguards to prevent former employees from bringing claims of discrimination when they do not have evidence to support their claims.  Without evidence directly showing that there was a discriminatory motive behind the employee’s termination, the employee must usually show that he or she was treated differently than other similarly situated employees who are not members of the protected class.  Courts often will enter summary judgment against employees who neither present direct evidence of discrimination nor can identify relevant “comparator” employees who were allegedly treated better.  The employee-comparator who was allegedly treated better than the plaintiff must be “similarly situated” to the disgruntled employee “in all material respects.”  Peter Mavrick is Fort Lauderdale employment attorney with extensive experience in defending businesses and their owners against claims alleging employment discrimination, retaliation, and unpaid wages.  The Mavrick Law Firm also defends the interests of employers in Miami, Boca Raton, and Palm Beach.

Employers need not endure the time and expense of a full trial when a former employee makes a baseless claim of employment discrimination.  When a disgruntled employee does not have direct or statistical evidence of discrimination, the employer will likely prevail in summary judgment by showing that the disgruntled employee’s claimed employee-comparators are not sufficiently similar to the employee in all material respects.

“A plaintiff may prove a claim of intentional discrimination through direct evidence, circumstantial evidence, or statistical proof.”  Alvarez v. Royal Atl. Developers, Inc., 610 F.3d 1253 (11th Cir. 2010).  Direct evidence of discrimination is evidence which unambiguously shows an employer had a discriminatory motive.  Wilson v. B/E Aerospace, Inc., 376 F.3d 1079 (11th Cir.2004) (“[O]nly the most blatant remarks, whose intent could mean nothing other than to discriminate on the basis of some impermissible factor constitute direct evidence of discrimination”).  When an employee does not have direct evidence or statistical evidence to prove discrimination, the employee must usually prove discrimination through the McDonnell Douglas test.  This test generally requires that the employee show that “(1) he was a member of a protected class; (2) he was qualified to do the job; (3) he was subjected to an adverse employment action; and (4) similarly-situated employees outside of the protected class were treated differently.”  Hester v. Univ. of Alabama Birmingham Hosp., 798 Fed. Appx. 453 (11th Cir. 2020).

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Florida businesses are responsible for the contractual obligations arising from agreements that the business authorized their employees to enter.  In certain circumstances, however, a Florida business can be responsible for contractual obligations even when the employees lacked actual authority to agree to the contract.  The legal doctrine of “apparent authority” can apply to make a contract binding on the company under certain circumstances giving an employee the appearance of authority to bind a company to a contract.  Peter Mavrick is a Miami business litigation attorney, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

Corporations and limited liability companies can only act by and through their authorized agents, such as employees or company officers.  An employee of a company can only act with the authority that he or she has been given.  “As a general rule, a principal may be held liable for the acts of its agent that are within the course and scope of the agency.” Roessler v. Novak, 858 So. 2d 1158, 1161 (Fla. 2d DCA 2003).  Sometimes, an employee of a company will exceed the authority given to her and enter into unauthorized contracts which purport to bind the company.

Even if the company had never actually given its employee the authority to enter into a contract, that company may still be responsible for the obligations in the contract if the company allowed or caused conditions that gave the appearance to an outside party that the employee had the authority to enter into the contract.  “Under Florida law, actual authority is not necessarily a precondition of an agency relationship.” Borg-Warner Leasing, a Div. of Borg-Warner Acceptance Corp. v. Doyle Elec. Co., Inc., 733 F.2d 833 (11th Cir. 1984).  “An agent’s authority need not be conferred in express terms, but may be implied or apparent under justifying circumstances.”  All Seasons Condo. Ass’n, Inc. v. Patrician Hotel, LLC, 274 So. 3d 438 (Fla. 3d DCA 2019).

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Non-compete agreements are often drafted with broad provisions to prevent a business’s former employee from competing for its customers for a period of time. To be enforceable non-compete agreements must be based on a legitimate business interest, such as trade secrets, confidential information, and substantial customer relationships. However, a legitimate business interest must be harmed by the act that is allegedly violating the non-compete agreement. For example, if a sales person is barred from competing against its former employer, the agreement may not be enforceable to bar the worker from holding such a non-sales position because it may not harm a legitimate business interest.  Peter Mavrick is a Palm Beach non-compete attorney and business litigation lawyer who has substantial experience with non-compete litigation, including injunction proceedings.  The Mavrick Law Firm also practices non-compete litigation and business litigation in Fort Lauderdale, Boca Raton, and Miami.

In the case of Thyssenkrupp Elevator Corp. v. Hubbard, 2:13-CV-202-FTM-29, 2013 WL 5929132, (M.D. Fla. Nov. 4, 2013), ThyssenKrupp Elevator Corporation (ThyssenKrupp) provided components, systems, and customized service programs for elevators, escalators, and moving walks. Larry Hubbard, Jr. (Hubbard) was hired by ThyssenKrupp’s predecessor, General Elevator Sales and Service, Inc. (GESS). Hubbard signed GESS’s Employment Agreement, as a condition of his employment. GESS’s Employment Agreement contained non-compete and non-solicitation provisions which for a period of 2 years, prohibited Hubbard from providing a product or service which  “resembles” or competes with a product or service he was involved with for GESS; and prohibited Hubbard from soliciting GESS’s customers.

GESS merged with ThyssenKrupp, leaving ThyssenKrupp as the surviving company. Hubbard later argued that his Employment Agreement was not transferred along with the stock to ThyssenKrupp, resulting in its exclusion from the merger. Hubbard asserted that ThyssenKrupp did not have standing to enforce the Employment Agreement because his Employment was not specifically included in the merger agreements. The trial court disagreed because the merger included all assets of GESS, whether disclosed in a prior transaction or not.

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