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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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Punitive damages punish and dissuade wrong-doers from committing egregious acts by increasing the damages award to exceed compensable injuries. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432 (2001) (the purpose of punitive damages is to punish and deter future wrongdoing); Engle v. Liggett Group, Inc., 945 So. 2d 1246, 1265 (Fla. 2006) (Punitive damages are calculated by multiplying the compensatory damages award by a number less than 10). A claim for punitive damages is therefore an important weapon in a litigant’s arsenal because it creates liability and risk exposure exceeding the value of the plaintiff’s actual claim. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003) (“The Court further referenced a long legislative history, dating back over 700 years and going forward to today, providing for sanctions of double, treble, or quadruple damages to deter and punish.”). Because the incentive to pursue punitive damages in unwarranted circumstances may be too difficult for some to resist, the Florida Legislature developed a heightened pleading standard to assert a claim for punitive damages.  See W.R. Grace & Co.–Conn. v. Waters, 638 So. 2d 502, 505 (Fla. 1994) (“We acknowledge the potential for abuse when a defendant may be subjected to repeated punitive damage awards arising out of the same conduct.”). While this enhanced standard may preclude some litigants from asserting punitive damages claims, it is unlikely to affect fraud claims because the pleading requirements for fraud and punitive damages coincide.  Peter Mavrick has successfully represented clients in Palm Beach, Broward, and Miami-Dade business litigation and related arbitration proceedings.

A claimant establishes a punitive damage claim with evidence demonstrating the tortfeasor (i.e., the defendant) acted with intentional misconduct or gross negligence. A tortfeasor is liable for punitive damages for engaging in intentional misconduct or gross negligence. Fla. Stat. § 768.72 (2). Intentional misconduct occurs when the tortfeasor knows the conduct is wrongful and has a high probability of injury but proceeds to act anyway. Id. at (2)(a) (“Intentional misconduct” means that the defendant had actual knowledge of the wrongfulness of the conduct and the high probability that injury or damage to the claimant would result”).  Gross negligence similarly occurs when reckless or wanton conduct constitutes a conscious disregard for the plaintiff’s rights. Id. at (2)(b) (“Gross negligence” means that the defendant’s conduct was so reckless or wanting in care that it constituted a conscious disregard or indifference to the life, safety, or rights of persons exposed to such conduct”). However, conclusory allegations of intentional misconduct or gross negligence will not sustain a punitive damage claim. Douse v. Boston Scientific Corporation, 314 F. Supp. 3d 1251, 1264 (M.D. Fla. 2018) (Conclusory allegations are insufficient to provide a reasonable basis, and instead “a plaintiff must plead specific acts committed by a defendant”). A pleader must therefore present evidence or make a proffer demonstrating a reasonable basis for the recovery of punitive damages. Compare Fla. Stat. § 768.72 (1) (“No claim for punitive damages shall be permitted unless there is a reasonable showing by evidence in the record or proffered by the claimant which would provide a reasonable basis for recovery of such damages”) and Fla. R. Civ. P. 1.120 (b) (a claim shall contain “a short and plain statement of the ultimate facts showing that the pleader is entitled to relief”).

This heightened pleading standard for punitive damage claims does not significantly alter what plaintiffs need to plead for fraud claims.  Claims asserting fraud must be pled with specificity, regardless of whether punitive damages are sought.  In addition, intent is an element of fraud. Fraud is perpetrated by a tortfeasor who, inter alia, intentionally and knowingly makes a false statement about a material fact for purposes of inducing reliance. Johnson v. Davis, 480 So. 2d 625, 627 (Fla. 1985) (providing the elements of fraud). Intent is thus a prerequisite of fraud and must be plead with particularity. Mejia v. Ruiz, 985 So. 2d 1109, 1113 (Fla. 3d DCA 2008) (“Proof of fraud requires proof of intent.”); Cedars Healthcare Group, Ltd. v. Mehta, 16 So. 3d 914, 917 (Fla. 3d DCA 2009) (All elements of fraud must be plead with particularity). A claim for punitive damages therefore does not impose an additional burden on a plaintiff claiming fraud, because fraud already contains an element of intent. Pearlman v. Prudential Ins. Co. of America, Inc., 686 So. 2d 1378, 1382 (Fla. 3d 1997) (“A claim of fraud sufficient to justify compensatory damages is also sufficient to support an award of punitive damages.”). Consequently, a claimant providing evidence of fraud claim automatically satisfies the punitive damages pleading standard. Espirito Santo bank v. Rogo, 990 S0. 2d 1088, 1090 (Fla. 3d 2007) (“When a party has presented sufficient facts in support of a fraudulent inducement claim that would entitle him to an award of compensatory damages, he has also presented sufficient facts that would support a request for punitive damages” because intent in an element of fraud); see also First Interstate Development Corp. c. Ablanedo, 511 So. 2d 536 (Fla. 1987) (“Proof of fraud sufficient to support compensatory damages necessarily is sufficient to create a jury question regarding punitive damages.”); Rappaport v. Jimmy Bryan Toyota of Fort Lauderdale, Inc., 522 So. 2d 1005, 1006 (Fla. 4th DCA 1988) (“Thus, in all cases of fraud the jury is empowered to award punitive damages.”). Plaintiffs with fraud claims should therefore consider asserting punitive damages claims because there is no additional burden of proof.  The leverage gained from the liability associated with punitive damages could help plaintiffs reach favorable resolutions in business litigation and other disputes.

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Under Florida law, a restrictive covenant is not enforceable “unless it is set forth in a writing signed by the person against whom enforcement is sought.” Fla. Stat. § 542.335(1)(a).  So, what happens if the written agreement is lost, destroyed or stolen? Generally, the loss or unintentional destruction of a written document does not affect the validity of the transaction of which it is the evidence, or the rights and liabilities of the parties to the instrument. Environmental Services, Inc. v. Carter, 9 So. 3d 1258 (Fla. 5th DCA 2009). Peter Mavrick is a Fort Lauderdale non-compete lawyer who has successfully defended many lawsuits involving non-competition, non-solicitation, and non-disclosure contracts.

In Environmental Services, Inc. v. Carter, Environmental Services, Inc. (“ESI”) sued to enforce a non-solicitation agreement against its former employee, Daniel Lejeune (“Lejeune”). ESI was unable to produce the actual signed agreement or a copy of it. ESI’s witnesses testified that 1) Lejeune was given the non-solicitation agreement to sign as a condition of his employment, and 2) ESI only used one form of the non-solicitation agreement since 2005 (two years prior to Lejeune’s hiring). Lejeune admitted signing a non-solicitation agreement, but he did not recall its terms. The trial court held that it could not determine the precise terms and validity of those terms without an executed copy of the non-solicitation agreement. The trial court declined to enforce the restrictive covenant against Lejeune.  ESI immediately appealed.

The appellate court reversed the trial court’s decision. Environmental Services, Inc. v. Carter held that Florida law does not require the original of a writing in order to admit evidence of its contents.  Parol evidence may be introduced to prove the contents of a contract provided that the proponent provides a satisfactory explanation that the original contract was lost or destroyed. Section 90.954(3), Florida Statutes. The appellate court remanded the case for the trial court to determine if the essential terms of the written agreement could be established through parol evidence, to the satisfaction of the trial court.

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Under Florida law, noncompete agreements signed after July 1996 are governed by Florida Statutes § 542.335.  This statute is the basis for court decisions as to whether any non-competition contract can be enforced in the State of Florida.  Over the years, court decisions have grappled with two related issues: (1) whether a non-compete agreement is “enforceable” and (2) whether and to what extent the non-competition agreement shall be “enforced.”  On first impression, this distinction seems nitpicky and mere wordplay.  However, in the arena of litigation over restrictive covenants and especially in the employment context, this distinction has been important in some cases.  Peter Mavrick is a Fort Lauderdale non-compete lawyer who has successfully defended and prosecuted non-compete litigation for businesses and their owners.

This apparently twisted distinction between the enforceability of noncompetition contracts versus enforcement of an already enforceable restrictive covenant arises from a particular section of Florida’s noncompete statute, section 542.335(g)(1), which states that in determining the enforceability of a non-compete agreement a court “[s]hall not consider any individualized economic or other hardship that might be caused to the person against whom enforcement is sought.”  Courts interpret this section in pari materia, i.e., in context, with another section of Florida’s restrictive covenant statute, section 542.335(1)(j).  Once a covenant against competition is determined by a court to be “enforceable,” the statute sets forth certain rules for enforcement in § 542.335(1)(j) and states in pertinent part: “A court shall enforce a restrictive covenant by any appropriate and effective remedy, including but not limited to, temporary and permanent injunctions.  The violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant.”

To determine the “appropriate and effective remedy” for enforcement of an enforceable restrictive covenant, courts maybe required, in certain circumstances, to consider individualized harm to the defendant in non-compete litigation.  In Transunion Risk and Alternative Data Solutions, Inc. v. MacLachlan, 625 Fe.Appx. 403 (11th Cir. 2015), the United States Court of Appeals for the Eleventh Circuit overturned a federal District Judge’s decision to grant an injunction against a former employee in a non-compete case.  The appellate court stated that “the district erred when it applied section 542.335(1)(g) in determining whether a preliminary injunction was an appropriate and effective remedy for the enforceable restrictive covenant [and] … failed to consider any harm that MacLachlan would suffer if the injunction was issued.”  Transunion explained the rationale for its interpretation that § 542.335(1)(g) is directed to “enforceability,” and not “enforcement,” of the restrictive covenant:

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This is Part Two of the two-part series of articles discussing the overtime wage exemption of truck loaders under the Fair Labor Standards Act (FLSA).  Following the United State Supreme Court’s decisions discussed in Part One, the United States Department of Labor (DOL) issued regulations interpreting the Motor Carrier Act Exemption set forth at 29 C.F.R. § 782.5.  The applicable DOL regulation (at § 782.5(a)) defines “loader” under the Motor Carrier Act (MCA) to mean “an employee of a carrier [under the Motor Carrier Act] … whose duties include … the proper loading of his employer’s motor vehicles so that they may be safely operated on the highways of the country.”  The regulations explain that a loader’s work “directly affects ‘safety of operation’ [of a motor vehicle] so long as he has responsibility when such motor vehicles are being loaded, for exercising judgment and discretion in planning and building a balanced load or in placing, distributing, or securing the pieces of freight in such a manner that the safe operation of the vehicles on the highways in interstate commerce will not be jeopardized.”  Following the DOL’s issuance of this regulation, substantial court litigation followed addressing the meaning, and ultimately the legal enforceability of this regulation.  Federal appellate court decisions have viewed the DOL regulation as an overeach of the DOL’s authority that properly resides with the Department of Transportation.  The Mavrick Law Firm defends businesses against overtime wage claims.

A relatively recent decision from the United States Court of Appeals for the Eighth Circuit in Williams v. Central Transport International, Inc., 830 F.3d 773 (8th Cir. 2016), rejected the DOL’s reference to “exercising judgment and discretion” set forth in 29 C.F.R. § 782.5(a) as “not the governing standard.”  Citing the Supreme Court’s decision in Levinson v. Spector Motor Serv., 330 U.S. 649, 67 S.Ct. 931 (1947), the Eighth Circuit in Williams stated that “the DOL has no authority to define what employees are subject to the Secretary of Transportation’s jurisdiction and therefore fall within the MCA Exemption … Accordingly, we give no weight or deference to the DOL’s regulation purporting to define who is an exempt loader.”  Williams further explained that:

“the DOL regulation, 29 C.F.R. 782.5(a), is contrary to the Supreme Court’s governing standard.  The ICC asserted jurisdiction over loaders because ‘a motor vehicle must be properly loaded to be safely operated on the highways’ … ‘What the [ICC] intended to cover was the physical act of loading freight in a safe manner.’ … ‘[L]oaders, even if closely supervised, remain within I.C.C. jurisdiction.’ … Thus, Pyramid’s de minimus exception ‘is not based upon whether the worker was supervised in activities that have an undeniable, direct effect on safety,’ such as loading a trailer bound for interstate travel. … [¶] Based on the Supreme Court’s controlling precedents, we conclude that, if an employee spends a substantial part of his time (as defined in Levinson, Pyramid, and Morris) participating in or directing the actual loading of a motor vehicle’s common carrier’s trailers operating in interstate or foreign commerce, the Secretary of Transportation has the authority to regulate that employee’s hours of service and the MCA Exemption applies, regardless of the employee’s precise role in the loading process.”

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This article is Part One in a two-part series of articles discussing the exemption of loaders from the wage-hour requirements of the Fair Labor Standards Act (FLSA).  Businesses whose works load large trucks transporting goods in interstate commerce can defend themselves from overtime and minimum wage claims.  Under the Motor Carrier Act exemption to the FLSA, loaders of trucks whose vehicle weight exceeds 10,001 pounds and meeting the “interstate commerce” requirement can be exempt from the overtime and minimum wage requirements of the FLSA.  The Mavrick Law Firm has successfully defended many businesses against overtime and minimum wage lawsuits by means of the Motor Carrier Act Exemption in Miami-Dade, Broward, and Palm Beach Counties.

To understand the Motor Carrier Act exemption to the FLSA, it is important to understand its enactment vis-à-vis the FLSA.  Enacted in 1935, the Motor Carrier Act authorized the Interstate Commerce Commission (ICC) to set the “qualifications and maximum hours of service” for employees of motor vehicle common carriers.  See 49 U.S.C. § 304(a), which was later repealed.  Congress transferred the ICC’s functions to the Secretary of Transportation with some revision of the statute, and this jurisdiction remains.   See 49 U.S.C. § 31502(b).  In 1938, Congress enacted the FLSA, which empowered the Secretary of Labor to regulate, inter alia, the maximum hours of covered employees.  See 29 U.S.C. § 207(a)(1).  Congress included the Motor Carrier Act Exemption to the FLSA to avoid potentially overlapping jurisdictions.  In the following years, the United States Supreme Court issued a series of decisions interpreting the Motor Carrier Act Exemption.

In United States v. American Trucking Ass’ns, 310 U.S. 534, 60 S.Ct. 1059 (1940), the Supreme Court rejected the contention of interstate truckers that all their employees are exempt, concluding that the ICC’s jurisdiction to regulate maximum hours “is limited to those employees whose activities affect the safety of [motor vehicle] operation.”  In Southland Gasoline Co. v. Bailey, 318 U.S. 44, 63 S.Ct. 917 (1943), the Supreme Court held that the Motor Carrier Act Exemption applies whenever the Secretary of Transportation has the authority to regulate the maximum hours of motor carrier employees, regardless of whether that authority has been exercised.  It is therefore irrelevant that the Secretary of Transportation has never set maximum hours for motor carrier employees.

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When parties execute two separate contracts and only one contract contains an arbitration clause, generally the parties cannot be compelled to arbitrate disputes arising from the contract that does not call for arbitration.  However, under certain circumstances courts will extend the arbitration provisions from one contract to a separate contract, and the parties may be bound to arbitrate disputes arising out of either agreement because the two agreements will be read together as one contract. Peter Mavrick has successfully represented clients in Palm Beach, Broward, and Miami-Dade business litigation and related arbitration proceedings.

Phoenix Motor Co. v. Desert Diamond Players Club, Inc. involved four agreements for the purchase of new motor vehicles. The purchase agreements contained an arbitration clause, but also stated that “[t]he Purchaser, before or at the time of delivery of the motor vehicle covered by the Order, shall execute such other forms of agreement or documents as may be required by the terms and conditions of payment indicated on the front of this Order.” Phoenix Motor Co. v. Desert Diamond Players Club, Inc., 144 So.3d 694 (Fla. 4th DCA 2014). The purchaser also signed an export policy imposing liquidated damages if Desert exported the new vehicle out of the United States within one year of purchase. The export policy stated that “[e]xecution of the purchase/lease documents by the purchaser/lessee shall constitute acceptance of these terms and conditions.”

The purchaser sued for a declaration that the export policy was invalid and unenforceable. The seller filed a motion to compel arbitration pursuant to the arbitration clause in the purchase agreements. The trial court in Phoenix Motor Co. addressed whether there was a valid agreement to arbitrate a dispute arising from the export policy. The trial court denied the seller’s motion and the seller immediately appealed.

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A non-compete covenant in an employment contract prohibits a former employee from competing with his/her former employer for a specified term after termination of employment. If the worker continues to work for the employer in a status other than an “employee”, then the starting point for the non-compete period may be affected. The determination of when the non-compete period begins to run depends on judicial interpretation of the contract.  Peter Mavrick is a non-compete lawyer who has extensive experience with non-compete agreements and defending against non-compete lawsuits.

In Anarkali Boutique, Inc. v. Ortiz, 104 So. 3d 1202 (Fla. 4th DCA 2012), Anarkali Boutique, Inc. (“Employer”) hired Nahomi Ortiz (“Ortiz”) in 2008 and entered into an employment agreement.  The agreement prohibited Ortiz from working as an employee, independent contractor, officer, director, or shareholder, in any employment, business, or activity that in any way competes with her employer within a one hundred-mile radius for two years after Ortiz was no longer employed by Employer. The agreement also stated that “[a]ny subsequent change or changes in her duties, salary or compensation will not affect the validity or scope of this Agreement.”

During Ortiz’s training, Employer paid Ortiz a salary. In 2009, Employer began classifying Ortiz as an “independent contractor”.  For example, instead of salary, she received a 35% commission on the services she performed. In exchange, Ortiz had to pay taxes on the commissions and had to pay her share of Employer’s rent, supplies, utilities, and insurance.

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