Modern building.Modern office building with facade of glass
Representing Businesses and Business Owners Contact Us Now!

Articles Posted in Business Litigation

Published on:

Section 542.335(1)(d), Florida Statutes, states that a non-compete agreement, in an employment context that exceeds two years is subject to a legal presumption that the non-compete period is unreasonable. An employer may overcome this legal presumption in variety of ways. If the court finds that a longer non-compete period is necessary to protect a legitimate business interest, the non-compete period may be enforced.  An employment non-compete exceeding two years might also be justified if the particular employee is especially important to the business. Peter Mavrick is a Miami non-compete attorney and business litigation attorney who has substantial experience with non-compete litigation, including injunction proceedings.

In the case of Avalon Legal Info. Services, Inc. v. Keating, 110 So. 3d 75, 84 (Fla. 5th DCA 2013), Judy B. Schneider (“Schneider”) a paralegal and owner of a business that provided civil process service training and consulting to Florida’s Sheriffs, bifurcated the business and sold the consulting portion to Gerard F. Keating (“Keating”), an attorney who previously acted as the supervising attorney for the business.  Schneider also sold the training and education portion of the business to Avalon Legal Information Services, Inc., a Florida corporation (“Avalon”). Schneider continued to work the consulting contracts with Keating and simultaneously worked for Avalon as an instructor in its training program, as well as co-authored a civil process manual with Avalon’s owner.

On October 1, 2008, Keating and Schneider entered into an independent contractor agreement (“Agreement”). Per the Agreement, Schneider was to continue to perform the same paralegal services for Keating as an independent contractor. The Agreement was to last two years, until September 2010, and was renewable at the parties’ option for an additional two years. The Agreement incorporated a non-compete/non-solicitation covenant. The Agreement permitted Schneider to continue to work as an instructor and manual writer for Avalon. The non-compete covenant prohibited Schneider from competing with and soliciting Keating’s civil process consulting contracts in the State of Florida for three years following the expiration of the Independent Contractor Agreement, i.e. until September 2013.

Published on:

Many businesses create new business concepts. A business concept, however, does not automatically evolve from an interesting idea to a legally protected trade secret.  A concept doesn’t need to be built to be protected, but the concept needs enough substance to be economically valuable and for a court to know what it’s protecting. Peter Mavrick is a Fort Lauderdale trade secret lawyer who represents businesses in trade secret litigation and other business litigation.

In the recent federal court case of ActivEngage, Inc. v. Smith, Middle District Court Case No: 6:19-cv-1638-ORL-37LRH, (M.D. Fla. Nov. 5, 2019), Ted Rubin (“Rubin”) and Defendant Todd L. Smith (“Smith”) co-founded ActivEngage, Inc. (“ActivEngage”), a company which provided messaging services, including live call, email, chat, texting, and advertisement services, to car dealerships throughout North America.  Rubin was the President and Smith was the CEO and later worked for ActivEngage in another capacity. Smith also created his own company, 360Converge, as a holding company for new technological ideas. Smith contended that he always presented ideas of value to ActivEngage first.

In 2018, Smith worked on a new product, ActivProspect, a “lead enhancement” product for dealerships.  Rubin and Smith’s relationship collapsed because of disagreements over the direction of ActivEngage. ActivEngage terminated Smith’s employment. Smith also resigned from the Board of Directors but continued to hold a third of ActivEngage’s stock. After Smith’s termination, he began developing new technology in form of a customer relationship management platform (“CRM”) for his company, 360Converge. Rubin discovered that Smith was planning to release a product similar to ActivProspect in December 2018.

Published on:

It is not uncommon for parties in a business relationship, such as partners, franchisors and franchisees, and employers and employees, to discover that they cannot agree on their rights with respect to each other.  Sometimes contracts are ambiguous, or the parties never determined how they would address a particular problem that later arises.

Florida law provides a mechanism to resolve such problems by way of declaratory judgment action.  This is a type of lawsuit that seeks clarification of rights rather than money damages.  It is most common in insurance coverage disputes, but also is used in business and employment disputes.  Peter Mavrick is a Miami business litigation lawyer.

Florida Statute § 86.011 allows Florida courts to render judgment on “the existence, or nonexistence: (1) Of any immunity, power, privilege, or right; or (2) Of any fact upon which the existence or nonexistence of such immunity, power, privilege, or right does or may depend, whether such immunity, power, privilege, or right now exists or will arise in the future.”  If a declaratory judgment is sought as to rights provided in a contract, it can be sought “either before or after there has been a breach” of the contract.  Fla. Stat. § 86.031.

Published on:

A business can seek an injunction to enforce a non-compete agreement before a lawsuit is completed if the business is suffering losses due to the violation of a non-compete agreement.  There are different legal standards for issuance of a temporary injunction, depending on whether the lawsuit and motion occur in federal or state court.  The federal legal standard (1) a substantial likelihood of success on the merits; (2) irreparable injury without the injunction; (3) the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) if issued, the injunction would not be adverse to the public interest.  Bloedorn v. Grub, 631 F.3d 1218 (11th Cir. 2011).  “Because preliminary injunctions are an extraordinary remedy, this relief is appropriate only if the movant clearly establishes the burden of persuasion on each element.”  Nuvasive, Inc. v. Leduff, 2019 WL 5962658 (M.D. Fla. 2019).  In addition, however, the party who obtains the injunction is required to post a bond.  Posting a bond can be expensive and may impact damages.  As a result, it should be considered when seeking or opposing an injunction.  Peter Mavrick is a Fort lauderdale non-compete attorney and business litigation attorney who has substantial experience with non-compete litigation, including injunction proceedings.

When seeking an injunction in federal court, a bond must be posted pursuant to Federal Rule of Civil Procedure 65(c).  The purpose of posting a bond is to redress costs and damages suffered by any party that is wrongfully enjoined.  Although the court has some discretion as to the amount of the bond to be posted, the amount should be enough to cover costs and damages that the enjoined party may suffer.

As an example, in North American Products Corporation v. Moore, 196 F. Supp. 2d 1217 (M.D. Fla. 2002), the District Court for the Middle District of Florida determined that an injunction should be imposed against a former employee of North American Products Corporation and Tru-Cut, a corporation the former employee started after leaving North American Products Corporation.  The former employee proceeded to compete against North American Products Corporation in violation of a non-compete agreement.  After finding that North American Products Corporation met the requirements for imposition of an injunction, the District Court held that a bond had to be posted.  To determine the amount of the bond, an evidentiary hearing was requiredThe District Court looked to the yearly revenues being earned by Tru-Cut and ordered North American Products Corporation to post a bond that would at least satisfy Tru-Cut’s annual projected revenue.  The Court set the bond at $500,000.

Published on:

Arbitration can be a useful tool to thwart unwanted litigation, and, therefore, contracting parties often include mandatory arbitration provisions in contracts to discourage unnecessary litigation. See, e.g., Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1412 (2019) (prohibiting employees from asserting a class action arbitration unless the class waived their right to sue in an employment agreement). However, a contracting party may not always want to pursue his/her claim in arbitration due to these same impediments. A unilateral arbitration provision can resolve this conundrum because it requires your counterpart to arbitrate while providing you with the option to seek redress through arbitration or the court system. The enforceability of these unilateral arbitration provisions has been questioned by Florida courts because they lack mutuality or may be unconscionable.  Peter Mavrick is a Fort Lauderdale business litigation attorney who has substantial experience in representing businesses in arbitration.

Florida courts would likely determine that unilateral arbitration provisions are not void for lack of mutuality. Florida’s Fifth District Court of Appeal originally ruled that unilateral arbitration provisions are unenforceable because they lack mutual consideration. R.W. Roberts Cont. Co., Inc. v. St. Johns River Water Manag. 423 So. 2d 630, 633 (5th DCA 1982) (Upholding the trial court’s order denying a motion to compel arbitration because “each severable clause of a contract should have its own consideration or mutual obligation.”). However, the Roberts decision was rejected and overturned because contracting parties never have mutual obligations or remedies at the same time. Rohlfing v. Tomorrow Realty Auction Co. Inc., 528 So. 2d 463 (5th DCA 1988) (“The extent, scope, and application of [the mutuality] concepts were always subject to much disagreement and today can be plainly stated to largely be nothing more than a smoke screen defense… In no real sense is there ever, at any one time, any mutuality of obligation or remedy.”); see also LaBonte Precision, Inc. v. LPI Indus. Corp., 507 So. 2d 1202 (4th DCA 1987) (“Mutuality of remedy in contracts as a requirement has largely disappeared from the law of American jurisdictions.”). Therefore, it is likely that mutuality is not an barrier to enforcing a unilateral arbitration provision. But we urge caution in this regard because there is little law on the subject matter and most authorities emanates from Florida’s Fifth Circuit Court of Appeal. See Avid Engineering, Inc. v. Orlando Marketplace Ltd., 809 So. 2d 1, 3 (5th DCA 2001) (“A reasonable interpretation of the [arbitration] statute is that it allows two or more parties to arbitrate “any controversy,” including those controversies in which only one party has the right to arbitrate.”). It is therefore possible that other districts may disagree and require mutuality before the arbitration provision can be enforced.

A unilateral arbitration provision may not be unconscionable depending on the facts and circumstances giving rise to the provision. A contract provision is unconscionable when it is procedurally and substantively unconscionable. See Belcher v. Kier, 558 So.2d 1039 (Fla. 2d DCA 1990); Complete Interiors v. Behan, 558 So.2d 48 (Fla. 5th DCA 1990). Procedural unconscionability exists when the parties’ bargaining power impacts their ability to know and understand the disputed contract terms. Kohl v. Bay Colony Club Condo., Inc., 398 So. 2d 865, 868 (Fla. 4th DCA 1981) (defining procedural unconscionability as “absence of choice” due to the parties “respective bargaining powers”, “education”, and “intelligence”). Substantive unconscionability exists when the terms of the contract are so unreasonable and unfair that is would shock the conscious. Woebse v. Health Care & Ret. Corp. of Am., 977 So. 2d 630, 632 (Fla. 2d DCA 2008) (“Substantive unconscionability requires an assessment of whether the contract terms are so outrageously unfair as to ‘shock the judicial conscience.”) (internal quotations omitted). Some courts have found that unilateral arbitration provisions are always substantively unconscionable to some degree. See Palm Beach Motor Cars Ltd. Inc. v. Jeffries, 885 o. 2d 990. 992 (4th DCA 2004) (“Some substantive unconscionability was present in the arbitration agreement in this contract.”); Bellsouth Mobility LLC v. Christopher, 819 So. 2d 171 173 (4th DCA 2002) (“Moreover, the substance of the arbitration provision seems unduly unfair. Although customers are bound to arbitration, Bellsouth still has the option of pursuing court action in some instances, including the collection of a debt.”); Prieto v. Healthcare & Ret. Corp. of Am., 919 So. 2d 531, 533 (Fla. 3d DCA 2005) (finding that the contract was procedurally unconscionable and the arbitration provision was substantively unconscionable). However, other courts have found that no unconscionability (substantive or procedural) exists in unilateral arbitration provisions. See Avid Engineering, Inc., 809 So. 2d 1, 5 (5th DCA 2001) (the court ruled that the unilateral arbitration provision was not unconscionable because the contracting parties were sophisticated entities with relatively equal bargaining power that negotiated at arm’s length and each modified many terms).

Published on:

This article is the second in a two-part series on contractual “merger” or “integration” clauses (the terms merger and integration are used interchangeably).  Integration/merger clauses purport to define a contract as being limited to only what is contained in the written document signed by the parties.  This can help ensure that neither party will later claim that he was promised something as part of the deal, but that promise was not actually written into the contract terms.  Under Florida law, merger clauses are enforceable and effective ways to ensure that the parties are in complete accord as to the terms of their agreement.  Integration clauses, however, are not ironclad and there are some limitations.  Peter Mavrick is a Fort Lauderdale business litigation attorney and Miami business litigation attorney who has extensive experience with breach of contract lawsuits and related claims.

In the context of a case involving a non-compete contract, Environmental. Services, Inc. v. Carter, 9 So. 3d 1258 (Fla. 5th DCA 2009), gave great weight to an integration/merger clause that provided in pertinent part, “[t]his Agreement constitutes the complete agreement between the parties with respect to the subject matter contained herein and revokes and supersedes all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral.”  Environmental Servs. v. Carter, 9 So. 3d 1258 (Fla. 5th DCA 2009) (emphasis added). Environmental Services, Inc. v. Carter found that, “[a]lthough the existence of a merger clause does not conclusively establish that the integration of the agreement is total, it is a highly persuasive statement that the parties intended the agreement to be totally integrated and generally works to prevent a party from introducing parol evidence to vary or contradict the written terms” and “the merger clause precludes the consideration of other documents to vary the terms of the agreement.”

“That [a contract] contained a merger clause is not determinative; the law remains that ‘the existence of a merger clause does not per se establish that the integration of the agreement is total.’”  Lowe v. Nissan of Brandon, Inc., 235 So. 3d 1021 (Fla. 2d DCA 2018).  There are three types of claims concerning the completeness of an agreement that may survive a merger clause: allegations that terms are missing from patently incomplete and ambiguous agreements, allegations concerning an agreement unrelated to the agreement at issue, and allegations that there is fraud in the inducement concerning a party’s motivation to sign the contract based on representations of the opposing party.

Published on:

This article is part one in a two-part series of articles on contractual “merger” or “integration” clauses, which purport to limit the terms of a contract to the terms contained in the written document signed by the parties.  This can help ensure that neither party will later claim that he was promised something as part of the deal, but that promise was not actually written into the contract terms.  Under Florida law, merger clauses are enforceable and effective ways to ensure that the parties are in complete accord as to the terms of their agreement.  Integration clauses, however, are not ironclad and there are some limitations.

A merger clause will not prevent a court from considering whether additional terms were intended when the contract contains a patent ambiguity.  Additionally, a merger clause will not prevent a party from claiming that she entered into the agreement only due to the fraud of the other party.  Peter Mavrick is a Broward County business litigation lawyer who has extensive experience in representing the interests of businesses and business owners.

Florida courts generally will not allow litigants to enter evidence to modify the clear terms of a written contract.  This legal principle is called the “parol evidence rule.”  The Supreme Court of Florida in Florida Moss Products Co. v. City of Leesburg, 112 So. 572 (Fla. 1927), explained the parol evidence rule as follows:

Published on:

Generally, a non-compete agreement is enforceable if it is in writing, supports an employer’s legitimate business interest, and is not overly restrictive in its duration and geographical area. See Florida Statute § 542.335.  The Florida Statute governing non-compete agreements lists several public policy considerations that appear, at first blush, to be an impediment to the enforcement of employer’s enforcement of non-compete agreements. These provisions suggest that an employer might need to prove to the court that an injunction is in the public interest before the court would enforce an injunction on a non-compete agreement. However, the interests of the public and the former employee are rarely influential in proceedings to enforce a non-compete agreement in Florida state courts.  Peter Mavrick is a Miami non-compete lawyer and business litigation lawyer who has extensive experience in representing the interests of businesses and business owners.

In theory, § 542.335, Florida Statutes, provides for a few legal bases whereby a court could refuse to enforce an otherwise valid non-compete agreement.  Section 542.335(g), Florida Statutes provides that “[i]n determining the enforceability of a restrictive covenant, a court: […] [s]hall consider the effect of enforcement upon the public health, safety, and welfare.”

Further, § 542.335(i) provides that:

Published on:

Agreements in restraints of trade are generally void unless they comply with the procedures of § 542.335, Florida Statutes.  The statute requires that any agreement restraining trade, such as a non-compete or non-solicitation agreement, be supported by a “legitimate business interest.”  An agreement restraining trade can only be enforced to the extent that the agreement protects this legitimate business interest.  It is therefore critical that litigants be familiar with what qualifies as a “legitimate business interest.”  The Florida Supreme Court has established that referral sources can qualify as something that can be a protectible legitimate business interest. Peter Mavrick is a Miami non-compete attorney and business litigation attorney who has extensive experience with non-compete litigation.

Florida’s non-compete laws are very pro-employer in comparison to most of the United States. Norman D. Bishara, Fifty Ways to Leave Your Employer: Relative Enforcement of Covenants Not to Compete, Trends, and Implications for Employee Mobility Policy, 13 U. Pa. J. Bus. L.751 (Spring 2011).  Nevertheless, Florida courts will not enforce a non-compete agreement unless it strictly complies with the requirements of Florida statutes.

Under Florida law, generally, “[e]very contract, combination, or conspiracy in restraint of trade or commerce in this state is unlawful.” Fla. Stat. § 542.18.  The exception is found in the express statutory authority found in § 542.335, Florida Statutes.  In pertinent part, § 542.335, Florida Statutes provides:

Published on:

Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”), § 501.201 et seq, Florida Statutes, allows a person to sue a business for unfair competition and deceptive or unconscionable business practices.  Although the statute allows a consumer to sue a business for violations of FDUTPA, Florida appellate court decisions have also allowed some businesses to sue other businesses under FDUPTA based on consumer harm. This expansion of FDUTPA is important because it allows aggrieved parties to recover more than their damages. FDUTPA allows the Court to enter an injunction or award attorneys’ fees – types of relief that are sometimes unavailable with other causes of action.  Peter Mavrick is a Miami business litigation attorney who has extensive experience with litigating claims under FDUTPA.

FDUTPA states that “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.”  Fla. Stat. § 501.204(1). “An unfair practice ‘offends established public policy’ and … is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’” Stewart Agency, Inc. v. Arrigo Enterprises, Inc., 266 So. 3d 207 (Fla. 4th DCA 2019). “[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.’”  PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So. 2d 773 (Fla. 2003).  “In any action brought by a person who has suffered a loss as a result of a violation of this part, such person may recover actual damages, plus attorney’s fees and court costs.”  Fla. Stat. § 501.211(2).

Florida’s Fourth District Court of Appeal in Caribbean Cruise Line, Inc. v. Better Bus. Bureau of Palm Beach County, Inc., 169 So. 3d 164 (Fla. 4th DCA 2015), held that FDUPTA is not limited to only consumer-plaintiffs.  In Caribbean, a plaintiff-business sued because the Better Business Bureau (“BBB”) portrayed itself as an unbiased business rating service to the public, but in reality, BBB would improve the score of a business if the business became “accredited” – a process requiring significant payment to BBB.  BBB claimed that the plaintiff could not make a FDUTPA claim because the alleged conduct was directed towards BBB’s customers, not plaintiff’s customers.  The appellate court disagreed, finding that non-consumers could bring a FDUTPA claim as long as consumers were harmed as well, because FDUTPA had been amended to replace the word “consumers” with “persons” in § 501.211, Florida Statutes. The appellate court determined that this statutory wording change meant that FDUTPA claims could be brought by parties that were not consumers of the defendant’s goods or services.

Contact Information