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Articles Posted in Non-Compete Agreements

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A frequent issue in business litigation is whether restrictive covenants in an employment contract are enforceable. “Florida statutory law (as a matter of public policy) does not allow a party to enforce a restrictive covenant unless it proves that enforcement is necessary to protect its legitimate business interests.” Evans v. Generic Sol. Eng’g, LLC, 178 So. 3d 114 (Fla. 5th DCA 2015). Generally, a “legitimate business interest must represent an investment by the employer and must enable unfair competition if misappropriated.” IDMWORKS, LLC v. Pophaly, 192 F. Supp. 3d 1335 (S.D. Fla. 2016). Florida’s non-compete statute, Section 542.335, includes a non-exhaustive list of examples of legitimate business interests, one of which is a party’s “extraordinary or specialized training.” Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Under Florida law, “a ‘legitimate business interest’ is an identifiable business asset that constitutes or represents an investment by the proponent of the restriction such that, if that asset were misappropriated by a competitor (i.e., taken without compensation), its use in competition against its former owner would be “unfair competition.” White v. Mederi Caretenders Visiting Servs. Of Se. Fla, LLC, 226 So. 3d 774 (Fla. 2017). Indeed, the Supreme Court of Florida has held that a “legitimate business interest is a business asset that, if misappropriated, would give its new owner an unfair competitive advantage over its former owner.” White v. Mederi Caretenders Visiting Servs. Of Se. Fla, LLC, 226 So. 3d 774 (Fla. 2017). An employer can enforce a non-compete agreement if “there [are] special facts present over and above ordinary competition such that, absent a non-competition agreement, ‘the employee would gain an unfair advantage in future competition with the employer.’” Passalacqua v. Naviant, Inc., 844 So.2d 792 (Fla. 4th DCA 2003).

Training an employee constitutes a legitimate business interest protectable by Florida law when the training rises to the level of being specialized or extraordinary. Training is classified as extraordinary when it exceeds ‘what is usual, regular, common, or customary in the industry in which the employee is employed.’” Dyer v. Pioneer Concepts Inc., 667 So. 2d 961 (Fla. 2d DCA 1996). The special training must go above and beyond “what would be common or typical in the industry.” Autonation Inc. v. O’Brien, 347 F. Supp. 2d 1299 (S.D. Fla. 2004). A business’ optional training will “not constitute a legitimate business interest sufficient to justify injunctive relief.” Austin v. Mid State Fire Equip. of Cent. Florida, Inc., 727 So. 2d 1097 (Fla. 5th DCA 1999). As such, Florida courts have found no legitimate business interest where an employee “was not required to attend the various training seminars and only ‘popped in and out’ of the meetings.” Autonation Inc. v. O’Brien, 347 F. Supp. 2d 1299 (S.D. Fla. 2004).

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The “first to breach” or “prior breach” doctrine is a commonly raised defense by employees in actions brought by their former employers to enforce restrictive covenants. Under Florida law, an employer’s prior breach of its employment contract may prohibit the employer from enforcing restrictive covenants under the same agreement. Employees typically raise the “prior breach” defense based on allegations that the former employer failed to pay wages due under their employment contract. This alleged failure to pay could constitute a material breach of the entire employment agreement and render the non-compete unenforceable. In the non-compete and trade-secret context, employers seek injunctions to stop their former employees from unlawfully competing and/or exposing confidential, trade secret information. In these situations, employers are generally barred from enforcing covenants (such as non-compete agreements or confidentiality provisions) against the employee if the material breach was based on a “dependent” covenant in the contract and the non-compete covenants are not “independent” covenants. 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 businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

When the “prior breach” doctrine is raised as a defense, Florida courts are tasked with reviewing the subject non-compete agreements to determine whether the relevant contract provisions are dependent or independent covenants. Florida courts must construe the subject contract according to its plain language and “consider the provisions at issue in the context of the entire agreement in order to achieve ‘a reasonable construction to accomplish the intent and purpose of the parties.’” Hand v. Grow Constr., Inc., 983 So. 2d 684 (Fla. 1st DCA 2008). Whether the payment obligations under the employment agreements were dependent or independent covenants is an issue of law that turns on the proper interpretation of the contracts. Morgan v. Herff Jones, Inc., 883 So. 2d 309 (Fla. 2d DCA 2004). “Florida law limits [the] defense [of a prior breach] to ‘dependent covenants.” Reliance Wholesale, Inc. v. Godfrey, 51 So. 3d 561 (Fla. 3d DCA 2010).

The general rule in Florida is that a “material breach of [a contract] allows the non-breaching party to treat the breach as a discharge of his contractual liability.” In re Walter M. Thomas, Debtor, 51 B.R. 653 (M.D. Fla. 1985). Indeed, the Supreme Court of Florida explained that “the nonbreaching party is relieved of its duty to tender performance and has an immediate cause of action against the breaching party.” Hospital Mortg. Grp. v. First Prudential Dev. Corp., 411 So. 2d 181 (Fla. 1982). “Whether contractual provisions are considered dependent or independent is generally determined by the intent of the parties based on a reading of their entire contract.” Richland Towers, Inc. v. Denton, 139 So. 3d 318 (Fla. 2d DCA 2014). In Florida, covenants are generally considered dependent unless contrary language appears in the contract.

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Non-compete agreements between employers and their employees sometimes contain “forum selection clauses” that dictate where subsequent lawsuits related to the non-compete agreement can be filed. Under Florida and federal law, forum-selection clauses are presumptively valid absent a “strong showing” that enforcement would be unfair or unreasonable under the circumstances. It is important for employers to consider whether to include forum selection clauses when drafting their employment agreements because such a clause provides predictability for the employer if litigation ever arises. This is particularly true for businesses attempting to enforce non-compete agreements against former employees residing in different states. Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Like its federal counterpart, Florida law presumes that a contract’s forum selection clause is valid and enforceable. Am. Safety Cas. Ins. Co. v. Mijares Holding Co., LLC, 76 So. 3d 1089 (Fla. 3d DCA 2011). If an employer’s non-compete agreement contains a forum selection clause, courts will first determine whether the forum selection clause is enforceable. To do this, courts must first assess whether the given clause is mandatory or permissive. Slater v. Energy Servs. Grp. Int’l, Inc., 634 F.3d 1326 (11th Cir. 2011). A mandatory clause “dictates an exclusive forum for litigation under the contract” whereas a “permissive clause authorizes jurisdiction in a designated forum but does not prohibit litigation elsewhere.” Global Satellite Commc’n Co. v. Starmill U.K. Ltd., 378 F.3d 1269 (11th Cir. 2004). Mandatory clauses are accordingly given more weight. AutoNation, Inc. v. Hall, 2019 WL 3712008 (S.D. Fla. May 29, 2019). A mandatory forum selection clause is “presumptively valid and enforceable” absent a “strong showing that enforcement would be unfair or unreasonable under the circumstances.” Krenkel v. Kerzner Int’l Hotels Ltd., 579 F.3d 1279 (11th Cir. 2009).

The Eleventh Circuit Court of Appeals found that a forum selection clause can “be invalidated when: (1) its formation was induced by fraud or overreaching; (2) the plaintiff would be deprived of its day in court because of inconvenience or unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene public policy.” Krenkel v. Kerzner Int’l Hotels Ltd., 579 F.3d 1279 (11th Cir. 2009). Federal and Florida courts have further found that litigants can attempt to avoid a valid forum selection clause by making an evidentiary showing that the “contractually selected forum is inconvenient.” Stewart Organization, Inc., v. Ricoh Corporation, 810 F.2d 1066 (11th Cir. 1987). Indeed, courts routinely hold that a “factor which might justify refusal to enforce a forum selection clause would be ‘if the chosen forum is seriously inconvenient for the trial of the action.’” The Bremen v. Zapata Off–Shore Co., 407 U.S. 1 (1972). However, this is a heavy burden to meet given a presumptively valid forum selection clause.

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Employees owe their current employers a duty of loyalty under Florida law. This duty of loyalty is a specific fiduciary duty that requires employees to act in the best interest of their current employers.  One example of such a breach is where an employee who starts a competing business while still working for the employer. Another example is where an employee uses its current employer’s confidential information for personal gain outside the scope of employment and without the employers’ knowledge. In these breach of loyalty scenarios, businesses may have viable causes of actions against the breaching employees and may be entitled to lost profits and other damages. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.

“An employee owes a duty to her employer to exercise diligence and good faith in matters relating to the employment.” Brigham v. Brigham, 11 So. 3d 374 (Fla. 3d DCA 2009). Specifically, “an employee may not engage in disloyal acts in anticipation of his future competition, such as using confidential information acquired during the course of his employment or soliciting customers and other employees prior to the end of his employment.” Insurance Field Services, Inc. v. White & White Inspection & Audit Service, Inc., 384 So. 2d 303 (Fla. 5th DCA 1980). Notably, an employee does not need to be a manager or executive with the employer to have a duty of loyalty. Fish v. Adams, 401 So. 2d 843 (Fla. 5th DCA 1981). Indeed, a business has a right to expect that its employees “will not solicit fellow employees on the job to join the employee’s competing business venture.” Terry Roberts Site Work, Inc. v. Unemployment Appeals Com’n, 908 So. 2d 592 (Fla. 5th DCA 2005). However, it is important to note that an employee’s “[a]cts consisting of mere preparation to open a competing business, such as opening a bank account or obtaining office space or telephone service ordinarily do not breach a duty of loyalty” under Florida law. Furmanite Am., Inc. v. T.D. Williamson, Inc., 506 F. Supp. 2d 1134 (M.D. Fla. 2007).

It is a breach of fiduciary duty for a person to misuse confidential information to the detriment of the person who he owes a duty of loyalty. See NHB Advisors, Inc. v. Czyzyk, 95 So. 3d 444 (Fla. 4th DCA 2012). “The elements of a claim for breach of fiduciary duty are: the existence of a fiduciary duty, and the breach of that duty such that it is the proximate cause of the plaintiff’s damages.” Gracey v. Eaker, 837 So. 2d 348 (Fla. 2002).  In Audiology Distribution, LLC v. Simmons, 2014 WL 7672536 (M.D. Fla. May 27, 2014), the plaintiff’s claim for breach of fiduciary duty was based on allegations that the defendants sold hearing aids and other related services to its patients by misappropriating and wrongfully utilizing confidential patient information. Audiology held the breach of fiduciary duty claim could be based on the employee’s use confidential customer information. Namely, the employee used his employer’s customer information to drive hearing aid sales for his own personal gain while still employed. The employer was entitled to damages as a result.

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The recent appellate decision from Florida’s Second District Court of Appeal in Capital Wealth Advisors, LLC v. Capital Wealth Advisors, Inc., 2021 WL 4898462 (Fla. 2d DCA 2021), clarified whether a business can get out of a financially unfavorable contract on the grounds that its “lopsidedness or open-endedness” is an invalid restraint on trade or commerce.  In reaching its decision, the appellate court interpreted the meaning of Florida Statute § 542.18, which provides that “[e]very contract, combination, or conspiracy in restraint on trade or commerce in this state is unlawful,” and its interplay with Florida’s non-compete statute, Florida Statute § 542.335.  Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach.  The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The Capital Wealth Advisors case involved a dispute over a contract where a company promised to pay very generous commissions to an insurance agent.  The contract promised large commission percentages.  The contract also promised that the “commission sharing arrangement would survive termination and continue in perpetuity.  In the business litigation, the company obtained summary judgment against the agent on the grounds that the commissions contact “constituted an unlawful restraint on trade in violation of section 542.18 (i.e., Florida’s restraint on trade or commerce statute) and 542.335 (i.e., Florida’s non-compete contract statute).  In evaluating the trial court’s decision, the appellate court explained “we need not reach the reasonableness of the scope of the Agreement or whether it is necessary to protect a legitimate business interest under section 542.335 unless and until we determine that the commission sharing arrangement is, in fact, a restraint on trade or commerce under section 542.18.”  The company argued the contract constitutes a “restraint on trade or commerce” because it imposes a “substantial financial disincentive” on the company.  The company emphasized “how good a deal this is for the Agent, and how correspondingly severe the effects of the deal have been to the” company.  The appellate court explained, however, that the contract “might very well have been—or became, in light of circumstances developed after its execution—quite advantageous to the Agent and disadvantageous to the Company … This does not make it a restraint on trade or commerce.”

Capital Wealth Advisors explained that Florida Statute 542.18 prohibits restraints “on trade or commerce in general—not on the competitiveness or incentives of individual actors.”  The appellate court relied on federal courts’ interpretations of federal antitrust law, including the United States Supreme Court decision in Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (“The law directs itself not against conduct which is competitive, or even severely so, but against conduct that tends to destroy competition itself”) and a recent case from the United States District Court for the Southern District of Florida, United Am. Corp. v. Bitmain, Inc., 2021 WL 1807782 (S.D. Fla. 2021) (“[a]n unreasonable restraint on trade is one that harms competition in general, rather than the plaintiff, or any other competitor”).  Section 542.18 does not prohibit every contract that might substantially reduce the competitiveness or profit motive of a party to the contract.  On the contrary, “section 542.18 governs restraints on ‘trade’ or ‘commerce’ itself—not the discreet effects that agreements have on the parties who enter into them.”  The appellate court in Capital Wealth Advisors determined that the company agreed to the contract even though it financially favored the agent.  Nevertheless, such a contract does not retrain trade or commerce in the insurance market.  “Here, there is nothing keeping the Agent from competing against the Company, or vice versa, by utilizing the very same referral sources that it provided to the Company.”  Fundamentally, the contract did not negatively affect consumers’ ability to procure insurance products since both the company and the agent can freely compete for the same business.

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Florida law sets forth detailed statutory rules governing enforcement of restrictive covenants, commonly known as “non-compete agreements.”  Florida Statutes, section 542.335, provides that parties may agree to restrict or prohibit competition in certain circumstances, so long as they protect one or more legitimate business interests and are reasonable in geographic and temporal scope.  In determining whether to enforce a non-compete agreement, Florida courts assess whether enforcement of the non-compete will ultimately protect against unfair competition.  Under Florida law, set forth in F.S. § 542.335(1)(h), “[a] court shall construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement.”  Peter Mavrick is a Miami non-compete attorney, and also advocates for clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in business litigation, trade secret litigation, non-compete agreement litigation, employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

In the recent appellate decision GFA International, Inc. v. Trillas, 2021 WL 3889283 (Fla. 3d DCA 2021), Miami’s Third District Court of Appeal reversed a trial Judge’s decision to deny an injunction against a former employee who was competing against the employer.  The appellate court took the extraordinary measure of remanding the case to the trial court for entry of a temporary injunction in favor of the employer.  The employer, GFA International, Inc. (GFA), was an engineering company that had hired Eric Trillas (Trillas) to serve as its inspections manager.  GFA promoted the employee to branch manager of its Miami location, and he managed the day-to-day operations of the branch including overseeing marketing, sales, finances, and helping bring in new clients and work for GFA.  Trillas was in charge of the facility support services department, which provided post storm engineering consulting, assisted with developing marketing materials, advertised GFA’s post hurricane marketing services, and brought in clients for post storm-related services.

During his employment, Trillas signed a restrictive covenant that prohibited during his employment, and for two years thereafter, (1) any direct or indirect competition against GFA and (2) accepting any business from any of GFA’s existing or prospective customers.  Trillas also contractually agreed to refrain, during his employment and for two years post-termination, from soliciting GFA’s GFA’s existing and prospective clients.  Aside from Florida’s restrictive covenant statute governing an employee’s competitive acts against his or her employer, Florida common law also prohibits an employee’s competition during the employment relationship.  Under Florida law, an employee may not engage in disloyal acts in competition against his or her employer, and this includes disloyal acts in anticipation with competition against his or her employer.”  Fish v. Adams, 401 So.2d 843 (Fla. 5th DCA 1981).  The case facts indicated that Trillas violated both his statutory non-compete duties as well as his common law duties barring competition against his employer GFA.

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Forensic examinations of cellular phones and other electronic devices are needed when a party willfully withholds relevant information during discovery or where a party is unwilling or unable to search their electronic devices on their own accord. Federal courts can order a party to submit their electronic devices for a forensic examination in business litigation cases under certain circumstances. A forensic examination creates a “mirror image” of an electronic device that “contains all the information in the computer, including embedded, residual, and deleted data.” Wynmoor Cmty. Council, Inc. v. QBE Ins. Corp., 280 F.R.D. 681, 686-87 (S.D. Fla. 2012). The forensic examination is typically performed by an independent third-party who is appointed by the court and agreed upon by the parties. 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, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Forensic examinations of cellular phones are routine in Florida courts, so long as the forensic image will reveal relevant, discoverable information. Procaps S.A. v. Patheon Inc., 2014 WL 11878435, at *2-3 (S.D. Fla. 2014) (granting forensic examination of mobile phones). “During discovery, the producing party has an obligation to search available systems for the information demanded.” Wynmoor, 280 F.R.D. at 685.  In business litigation, electronically stored information is discoverable under Federal Rule of Civil Procedure  34(a). Deleted computer files, whether e-mails or otherwise, are likewise discoverable. Bank of Mongolia v. M&P Global Fin. Servs., 258 F.R.D. 514 (S.D. Fla. 2009). While a responding party usually may comply by “translat[ing] the data into a usable form,” a “requesting party itself may need to check the data compilation.”  In re Ford Motor Co., 345 F.3d 1315, 1316-17 (11th Cir. 2003).

In determining whether a forensic examination is necessary, courts generally consider “whether the responding party has withheld requested information, whether the responding party is unable or unwilling to search for the requested information, and the extent to which the responding party has complied with discovery requests.” Wynmoor, 280 F.R.D. at 687.  “When a requesting party demonstrates . . . the responding party’s failure to produce requested information, the scales tip in favor of compelling forensic imaging.”  Id.

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It is critical that Florida employers carefully write their non-compete agreements to ensure they are enforceable and prevent employees from performing the types of activities that the employer needs.  Non-compete law in Florida is nuanced and slight deviations in contract wording can sometimes mean the difference between success or failure.  Peter Mavrick is a Miami non-compete attorney, and also advocates for clients in Fort Lauderdale, Boca Raton, and Palm Beach, Florida.  The Mavrick Law Firm represents clients in business litigation, trade secret litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.

While non-compete agreements are interpreted pursuant to principles of general contract law, non-compete law is often considered to be a niche area of law.  Non-compete contracts are governed by Florida Statute § 542.335.  This statute limits the enforcement of non-compete agreements in certain areas, inter alia, limiting enforcement in circumstances where the employer has a legitimate business reason for the non-compete agreement (§ 542.335(1)(b)), limiting the enforceable time period (§ 542.335(1)(d)(1)), and barring enforcement of contract terms limiting the court’s ability to enforce attorneys’ fees (§ 542.335(1)(k).

Particular terms in non-compete agreements often have particular meanings.  For example, determining whether the term “solicitation” applies to certain conduct can be deceptively difficult.  Generally, for an activity to qualify as solicitation under the common meaning of the word, there must be a communication coupled with an underlining intention behind that communication.  Solicit, Merriam-Webster (available at: https://www.merriam-webster.com/) (“to approach with a request or plea” or “to urge (something, such as one’s cause) strongly”);  Solicitation, Black’s Law Dictionary (11th ed. 2019) (“an attempt or effort to gain business”).  Whether a non-compete agreement barring “solicitation” bars particular conduct is determined by the general rules of contract interpretation and cases.

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The decision whether to bring a case in federal court or Florida state court can have significant consequences to the disposition of non-compete litigation.  While both federal and Florida will usually apply the same substantive law, the procedure applied differs.  This is particularly pertinent in non-compete litigation.  Florida courts, when considering whether to enjoin a former employee from competing, will not consider particular categories of evidence because of a Florida statute (§ 542.335(g)(1-3).  Federal courts are free of this limitation, and may consider nearly any admissible and relevant evidence.  This distinction can ultimately mean the difference between whether an employee or an employer will prevail in non-compete litigation. Peter Mavrick is a Miami non-compete attorney, and also advocates for clients in Fort Lauderdale, Boca Raton, and Palm Beach, Florida. The Mavrick Law Firm represents clients in business litigation, trade secret litigation, employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

Non-compete litigation can be heard in both federal courts and state courts.  While a Florida court almost always has jurisdiction to hear a Florida non-compete case, there are certain requirements before a matter may be heard in federal court.  The primary method by which a federal court would have jurisdiction is that a “federal question” is raised.  This can happen when a non-compete claim is brought along with a trade secret claim under the federal Defend Trade Secrets Act.  18 U.S.C. § 1836, et seq.  While it is technically possible that a federal court can have jurisdiction over the parties because a “diversity of citizenship” between the plaintiff and defendant, this would rarely happen because both a company attempting to enforce a non-compete and the employee will usually qualify as a citizens of Florida.

Federal courts and Florida courts have their own rules of civil procedure.  While the Florida Rules of Civil Procedure were derived in significant part from the federal rules, the differences between them are substantial, and include different pleading and discovery requirements.  There are also differences between federal and Florida courts which do not arise from the differences in procedural rules.  Generally, federal courts have a greater budget and fewer cases, and so may have more time and staff to address complex and nuanced issues.  Federal courts also tend to place more time constraints which are less flexible than their Florida counterpart.

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Preservation of a business’ trade secrets may constitute a legitimate business interest that justifies the enforcement of a non-compete agreement. However, it is vital that a business seeking to enforce the non-compete agreement sufficiently prove the existence of the trade secret. General statements that the business has such valuable information cannot act as a substitute for proof. Peter Mavrick is a Fort Lauderdale non-compete attorney, and also advocates for clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in breach of contract litigation, trade secret litigation, non-compete agreement litigation, employment litigationtrademark litigation, and other legal disputes in federal and state courts and in arbitration.

An example of this occurred in the case of Gould & Lamb, LLC v. D’Alusio, 949 So. 2d 1212 (Fla. 2d DCA 2007). Gould & Lamb, LLC (Gould & Lamb) and John D’Alusio (D’Alusio) executed an employment agreement that contained a non-compete provision that prohibited D’Alusio from working for a competitor for a two-year period after termination of his employment. Gould & Lamb later terminated D’Alusio’s employment because they eliminated his position from the firm. After an intensive negotiation, Gould & Lamb and D’Alusio entered into a severance agreement.  The severance agreement did not reference the earlier non-compete agreement, but instead referenced a different agreement that the parties entered. D’Alusio filed a lawsuit against Gould & Lamb, seeking a declaration that the severance agreement superceded the non-compete agreement.  Gould & Lamb filed a counterclaim against D’Alusio to enforce the non-compete agreement.

Gould & Lamb requested that the court reform the severance agreement to incorporate the noncompete provisions of the earlier contract. Reformation is a legal doctrine that is applied to correct a defective writing to accurately reflect the true terms agreed to by the parties. Providence Square Assn v. Biancardi, 507 So. 2d 1366 (Fla. 1987). To allege a claim for reformation, a plaintiff must allege that: 1) there was a written agreement, 2) there was a defect in the writing due to mutual mistake, fraud or misrepresentation, and 3) proof by clear and convincing evidence. Providence Square Assn v. Biancardi, supra. The trial court found there was no mistake of fact or inequitable conduct by D’Alusio that would support reformation of the severance agreement. The trial court concluded that the noncompete agreement did not survive.

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