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As discussed in our previous articles about hostile work environment claims in sexual harassment cases and race discrimination cases, the severity and pervasiveness of harassment necessary to qualify as an unlawful hostile work environment is extraordinary.  Many employment claims are made based on an occasional joke made in poor taste and microaggressions.  Even if the employee’s allegations are true, they often do not meet the requisite degree of severity or pervasiveness to be considered by courts to be unlawful.  By showing that the conduct does not meet this high threshold, a Florida employer can successfully prevail against these types of claims.  A recent federal appellate case from the United States Eleventh Circuit Court of Appeals (the federal appellate court governing the federal trial courts in Florida), Fernandez v. Trees, Inc., 18-12239, 2020 WL 3053383 (11th Cir. June 9, 2020), has further clarified this standard.  Peter Mavrick is Fort Lauderdale employment attorney who defends employers throughout South Florida.  The Mavrick Law Firm has extensive experience in defending businesses and their owners against claims alleging employment discrimination, retaliation, and unpaid wages.

Title VII of the Civil Rights Act of 1964 prohibits employers with more than 15 employees from discriminating “against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e–2(a)(1).

To establish a hostile work environment claim, a plaintiff must show that:

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Usually when a shareholder sues a corporation, the shareholder does so by means of a “derivative” action.  Derivative means “coming from another.”  A derivative action is a lawsuit that a shareholder files on behalf of the corporation against a third party – usually an officer, director or manager of the corporation – because of a loss or malfeasance by that third party that harmed the corporation.  However, when a corporation is small and closely held, sometimes the nature of the dispute between a shareholder and the corporation is such that a derivative action is inappropriate, and the shareholder should sue the corporation directly as an individual.  If a shareholder makes a mistake with regard to whether to sue derivatively or directly, the shareholder’s lawsuit may be dismissed. 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.

Florida courts have recognized that “as the community of interests between shareholders and their closely held corporation becomes more tightly interwoven, the basis upon which one differentiates derivative from individual actions becomes more critical and, as a consequence, the cases become less self-evident.”  Dinuro Investments, LLC v. Camacho, 141 So. 3d 731 (Fla. 3d DCA 2014).  The Florida legislature recently addressed the issue of when a shareholder can sue directly as an individual with the passage of Florida Statute section 607.0750.   It became law as of January 1, 2020.

Prior to enactment of the statute, Florida courts employed different tests to determine if a shareholder should sue derivatively or directly, but the law was not uniform.  As the Third District Court of Appeal noted, “the current Florida doctrine explaining which actions should be maintained directly and which must be brought derivatively is incredibly opaque…”  Id. 

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The Florida Uniform Trade Secrets Act (FUTSA) allows Florida businesses who have had their trade secrets misappropriated to seek damages or an injunction against the perpetrator of the misappropriation.  For the acquisition to be an unlawful misappropriation, the confidential information must usually have been acquired through “improper means.”  It is lawful for a Florida business to acquire and use another company’s trade secret for itself if it acquired that confidential information through proper means, such as through independent discovery of the trade secret, reverse engineering of the product which uses the trade secret, or through the voluntary disclosure by an owner of the trade secret.  Peter Mavrick is a Miami business litigation lawyer, 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.

Pursuant to FUTSA, the misappropriation of a trade secret through improper means is unlawful.  The manner of acquisition of trade secret is a critical question in determining whether there has been unlawful misappropriation.  Generally, if one knows or has reason to know that information was acquired through improper means, the use or disclosure of that information is unlawful.  FUTSA defines misappropriation to mean:

(a) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or

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A party to a non-compete agreement that was breached by the employer, may preempt its enforcement by seeking a declaratory judgment. To be effective, the declaratory action must include all parties who have a right to enforce the non-compete agreement. “[B]efore any proceeding for declaratory relief is entertained all persons who have an ‘actual, present, adverse, and antagonistic interest in the subject matter’ should be before the court.” Fla. Dep’t of Educ. v. Glasser, 622 So.2d 944 (Fla.1993). Section 86.091, Florida Statutes states “[n]o declaration shall prejudice the rights of persons not parties to the proceedings.” Peter Mavrick is a Fort Lauderdale non-compete lawyer 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 case of Reinstein v. Pediatric Gastroenterology, Hepatology & Nutrition of Florida, P.A., 25 So.3d 54 (Fla. 2d DCA 2009).  L. Julio Reinstein, M.D. (Reinstein), purchased an interest in a medical practice (hereinafter the “P.A.”). Dr. McClenathan (McClenathan), the founder of the P.A., retained a majority interest. Reinstein, McClenathan, and the P.A. executed various contracts to memorialize the new practice. The pertinent contracts included: (1) an Operating Agreement; (2) a Stock Transfer Restrictions and Buy–Out Agreement (the Buy–Out Agreement); and (3) a Professional Services Employment Agreement (the Employment Agreement). The Buy-Out Agreement and the Employment Agreement contained non-compete agreements.

Reinstein filed a lawsuit seeking a declaratory judgment that the two noncompete agreements were not enforceable because the P.A. and McClenathan breached the agreements. Reinstein’s employment with the P.A. was subsequently terminated, and he opened a medical practice in the restricted area. The P.A. filed a separate lawsuit seeking injunctive relief and damages against Reinstein and his new medical practice for their alleged violations of the non-compete agreement. The P.A. and McClenathan also moved to enforce the arbitration provisions contained in the agreements. The trial court referred Reinstein’s claims for damages to arbitration and retained the claims relating to the enforceability of the non-compete agreements. The parties went to arbitration, where all of Reinstein’s claims for damages against McClenathan and the P.A. were resolved. The issues relating to the non-compete agreements were the only issues remaining for the trial court to resolve. The trial court consolidated Reinstein’s lawsuit and the P.A.’s lawsuit to decide in one case. McClenathan moved for partial summary judgment, seeking to be dismissed from the litigation. McClenathan contended that he was not the party seeking enforcement of the non-compete agreement, so he should not be named individually in Reinstein’s claims.  The non-compete clause in the Buy-Out Agreement contained a provision that provided, “the [P.A.] or any Shareholder … the right to seek monetary damages … and equitable relief” in the event of a breach of the non-compete agreement. However, the non-compete in the Employment Agreement only gave the P.A. the right to seek damages and equitable relief in the event of a breach.

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The Family and Medical Leave Act (FMLA) was intended to allow “qualified employees” working for covered employers to be permitted unpaid medical leave arising from the employee or the employee’s family’s serious health conditions.  Sometimes, an employee who is terminated for other reasons will claim that the termination was unlawful retaliation for seeking benefits under the FMLA.  Employers who show the medical condition was not a “serious health condition” can prevail against these claims of FMLA retaliation.  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.

FMLA provides an employee the right to medical leave “[b]ecause of a serious health condition.” 29 U.S.C. § 2612(a)(1)(D).  Under federal law, employers are not allowed to interfere with “the exercise of or the attempt to exercise” that right to leave. 29 USC § 2615(a)(1). FMLA “prohibits an employer from retaliating against an employee who attempts to exercise any FMLA-created right.” Walker v. Elmore Cty. Bd. of Educ., 379 F.3d 1249 (11th Cir. 2004).  Additionally, “[a]n employer is prohibited from discriminating against employees or prospective employees who have used FMLA leave.” 29 C.F.R. § 825.220(c).

These restrictions, however, do not give employees carte blanche opportunity to receive leave whenever they choose.  Instead, an employee must be eligible for leave, which typically requires that the employee worked at the employer for 12 months and worked at least 1,250 hours.  29 U.S.C. § 2611 (a).  An employee’s request to take FMLA after the time they become eligible is usually protected, but an employee is not protected by requesting leave at a time before their eligibility. Walker v. Elmore County Bd. of Educ., 379 F.3d 1249 (11th Cir. 2004) (“There can be no doubt that the request—made by an ineligible employee for leave that would begin when she would still have been ineligible—is not protected by the FMLA”).

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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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