Florida Business Litigation Lawyer Blog

Published on: January 19, 2022

DEFENDING FORT LAUDERDALE EMPLOYERS: EMPLOYMENT LAWSUITS ALLEGING DISCRIMINATION AND HOSTILE WORK ENVIRONMENT

Employees (current and former) can sue their employers for race and gender discrimination and hostile work environments under the Florida Civil Rights Act (the “FCRA”). The FCRA was patterned after Title VII of the Civil Rights Act of 1964, which 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). Therefore, federal and state courts in Florida analyze FCRA claims under the same framework as Title VII claims. Alvarez v. Royal Atlantic Developers, Inc., 610 F.3d 1253, 1271 (11th Cir. 2010). Peter Mavrick is a Fort Lauderdale employment attorney, who defends businesses and their owners against employment law claims. Such claims include alleged employment discrimination and retaliation as well as claims for overtime wages and other related claims.

An employee suing under FCRA or Title VII can establish their race and gender discrimination claim with either direct or circumstantial evidence. See, e.g., Mathis v. Wachovia Bank, 255 F. App’x 425, 429 (11th Cir. 2007). To establish a prima facie case of discrimination under FRCA or Title VII, employees must show that: (1) they were a member of a protected class defined by race or gender; (2) they were qualified for the job; (3) they suffered an objectively serious adverse job action; and (4) they were treated less favorably than a similarly-situated individual. See Maynard v. Board of Regents of Div. of Univs. of Fla. Dep’t of Educ., 342 F.3d 1281, 1289 (11th Cir. 2003). An adverse action is objectively serious if it is “tangible enough to alter [the employee’s] compensation, terms, conditions, or privileges of employment.” See Stavropoulos v. Firestone, 361 F.3d 610, 617 (11th Cir. 2004). “The Supreme Court has stressed that Title VII provides no protection against ‘those petty slights or minor annoyances that often take place at work and that all employees experience.’” Harrison v. Belk, Inc., 748 F. App’x 936, 943 (11th Cir. 2018). Florida law provides that individuals who were allegedly treated better—known in legal speak as “comparators”—must be “similarly situated in all material respects.” Lewis v. City of Union City, 918 F.3d 1213, 1218 (11th Cir. 2019) (en banc) (emphasis added). In other words, the “comparator” must have “engaged in the same basic conduct (or misconduct) as the plaintiff” and that they “‘cannot reasonably be distinguished.’” Id. at 1227-28.

Once the plaintiff establishes a prima facie case, the burden shifts to the defendant to rebut the presumption of discrimination by giving a legitimate and non-discriminatory reason for the challenged adverse action. The burden then shifts back to the plaintiff after defendant establishes a non-discriminatory reason. The plaintiff then must prove with “significantly probative evidence” that the asserted reason for the adverse job action was merely a pretext for discrimination. Brooks v. County Commission of Jefferson County, Ala., 446 F.3d 1160, 1163 (11th Cir. 2006). To sufficiently demonstrate “pretext,” a plaintiff may not simply “quarrel with the wisdom of the employer’s reason; instead, as long as the reason ‘is one that might motivate a reasonable employer” to do what it did, the plaintiff “must meet that reason head on and rebut it.’” See Chapman v. AI Transport, 229 F.3d 1012, 1030 (11th Cir. 2000). A reason cannot be found a pretext for discrimination “unless it is shown both that the reason was false, and that discrimination was the real reason.” St. Mary’s Honor Center v. Hicks, 509 U.S. 502, 515 (1993).

Continue reading →

Published on: January 16, 2022

FORT LAUDERDALE BUSINESS LITIGATION: DEFENSE AGAINST CLAIMS OF TORTIOUS INTERFERENCE

By Mavrick Law Firm

In business litigation, it is common for parties to assert claims of breach of contract and, in the alternative, claims of tortious interference with a “business relationship.” Tortious interference is often asserted as a “back up” in case the contract claim fails. Tortious interference with an advantageous business relationship is essentially a claim that the opposing party engaged in unfair competition. Florida law, however, gives broad latitude to competitors to engage in competition, so long as the competitor uses lawful means and is not trying to unlawfully restrain trade. 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.

In Jay v. Mobley, 783 So.2d 297 (Fla. 4th DCA 2001), the plaintiff (Jay) unsuccessfully tried to purchase a parcel of real property in West Palm Beach from the owner of the property (Mobley). Jay and Mobley exchanged letters concerning Jay’s purchase of the property. Before Jay could close on the property, Mobley’s tenant, Nugent, made an offer to buy the property, which Mobley accepted. Jay was upset that he did not acquire the property, and so he sued Mobley for breach of contract. The appellate court, however, determined that the exchange of letters between Jay and Mosely lacked too many essential terms to create binding contract. As one Florida appellate court has explained, “[t]he courts are simply not authorized to draft a contract for the parties when the parties themselves have failed to reach agreement on essential details.” Craig R. Weiner Assocs., Inc. v. Sherden, 444 So.2d 431 (Fla. 4th DCA 1983).

Although Jay lost on the breach of contract claim, he also sued the tenant, Nugent, for tortious interference with an advantageous business relationship. Jay’s tortious interference claim was based on an alleged business relationship between Jay and Mobley which “gave rise to an understanding” that “in all probability would have been completed” had Nugent not interfered. To win on this claim, Jay had to prove Nugent’s conduct was not “unjustified” within in the definition of the tort. In ISS Cleaning Servs. Group, Inc. v. Cosby, 745 So.2d 460 (Fla. 4th DCA 1999), Florida’s Fourth District Court of Appeal explained the elements of a tortious interference claim: “A party … must show 1) the existence of a business relationship, 2) knowledge of the relationship on the part of the defendant, 3) an intentional and unjustified interference with the relationship, and 4) damage to the plaintiff as a result of the tortious interference with the relationship. An action for tortious interference with a prospective business relationship requires a business relationship evidenced by an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered.”

Continue reading →

Published on: January 12, 2022

MIAMI BUSINESS LITIGATION: TRADE DRESS INFRINGEMENT

By Mavrick Law Firm

Under federal law, the term “trade dress” involves the total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques. For example, “[t]he design or packaging of a product may acquire a distinctiveness which serves to identify the product with its manufacturer or source.” TrafFix Devices, Inc. v. Marketing Displays, Inc., 432 U.S. 23, 121 S.Ct. 1255 (2001). Like trademarks, trade dress is protected under Section 43(a) of the Lanham Act. Peter Mavrick is a Miami business litigation lawyer, 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, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The United States Court of Appeals for the Eleventh Circuit explained in Dippin’ Dots, Inc. v. Frosty Bites Distribution, LLC, 369 F.3d 1197 (11th Cir. 2004), that a business seeking to prove trade dress infringement must demonstrate that “(1) the product design of the two products is confusingly similar; (2) the features of the product design are primarily non-functional; and (3) the product design is inherently distinctive or has acquired secondary meaning.” Business litigation over trade dress uses the same spectrum of distinctiveness found in trademark law: trade dress can be generic, descriptive, suggestive, arbitrary, or fanciful. Federal courts examine trade dress to determine whether it is inherently distinctive. In the Eleventh Circuit (i.e., the federal appellate court governing federal trial courts in the State of Florida), the legal standard for the distinctiveness of trade dress depends on facts that include, “[w]hether it [is] a ‘common’ basic shape or design, whether it [is] unique or unusual in a particular field, [and] whether it [is] a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods viewed by the public as a dress or ornamentation for the goods.” Ambrit, Inc. v. Kraft, Inc., 812 F.2d 1531 (11th Cir. 1986). Courts do not assess trade dress elements piecemeal, but instead assess the full context. As the United States District Court for the Southern District of Florida explained in Carillon Importers Ltd. v. Frank Pesce Group, Inc., 913 F.Supp. 1559 (S.D. Fla. 1996), “it is the combination of elements and the total impression that the dress gives to the observer that should be the focus of a court’s analysis of distinctiveness.”

For example, in one remarkable lawsuit litigated in federal court in Palm Beach, an operator of several restaurants sued a competitor for trade dress infringement. The plaintiff business operated under the name “Miller’s Ale House,” and sued a competing restaurant operating under the name “Carolina Ale House.” The competitor argued that Miller’s trade dress is generic and unprotectable. Miller argued in response that its trade dress is distinct, especially when considering the overall impression conveyed by Miller’s restaurant interior, its red logo signage, and the use of “ale house” in various menu items. The federal court disagreed with Miller and held that Miller’s restaurants lacked inherent distinctiveness. The Judge concluded “there is nothing unique or unusual about the interior elements Miller claims as its trade dress. Numerous restaurants have a centrally located bar, two hosts at the host station, an open kitchen, servers with dark Polo shirts and khaki lower garments, and wood on the walls. There is also nothing particularly noteworthy about the design or placement of Miller’s menu, red restaurant signage, or promotional materials. These interior characteristics, when viewed in combination, are simply too generic to be protectable.” Miller’s Ale House, Inc. v. Boynton Carolina Ale House, LLC, 745 F.Supp.2d 1359 (S.D. Fla. 2010).

Continue reading →

Published on: January 9, 2022

FORT LAUDERDALE BUSINESS LITIGATION: RECOVERY OF LOST PROFITS FROM BREACH OF CONTRACT

By Mavrick Law Firm

In breach of contract litigation between businesses, a frequent issue is the amount of allowable damages. Florida appellate courts scrutinize the method for computing damages in business litigation, using the “de novo” standard of review (i.e., no deference to the decision of the trial court) when the method used at trial for computing damages involves a strictly legal issue. 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.

In cases where a business repudiates a contract and prevents the opposing party from performing the contract, Florida law allows the non-breaching party to elect between what are called “reliance damages” (i.e, the expenses of preparing to perform, the recovery of which will place the recipient in the same position it occupied before entering into the contract) or, alternatively, “lost profits (i.e., the benefit of the bargain or “expectation interest”). On this legal issue, Florida law is aligned with the Restatement (Second) of Contracts, which discusses at sections 347 and 349, respectively, compensation for the non-breaching party’s “expectation interest” and “reliance interest.” This seemingly simple legal distinction has resulted in a great deal of litigation. In many cases, plaintiffs have made the mistake of not thinking carefully about how to prove their damages at trial.

It is no surprise that many parties in commercial litigation seek the “lost profits” method because it seems to provide the potential for a larger damages award. As Miami’s Third District Court of Appeal explained in the case Pathway Fin. v. Miami Int’l Realty Co., 588 So.2d 1000 (Fla. 3d DCA 1991), a party can recover only those prospective profits “which would have been possible only if the contract would have been fully performed by the [non-breaching party].” The computation of damages in such a case requires the non-breaching party to deduct from the anticipated contract revenue the costs incurred in performing the contractual services. See, e.g., Marabella Park Homeowners Ass’n, Inc. v. My Lawn Serv., Inc., 12 o.3d 807 (Fla. 3d DCA 2009) (In reversing damages award, the appellate court explained that “although the contract price could easily be ascertained, [the non-breaching party] failed to produce evidence of its costs and expenses in performing the five-year contract”). Typically, these costs include an appropriate allocation of overhead as well as any personnel expenses that would have been incurred.

Continue reading →

Published on: January 2, 2022

FORT LAUDERDALE BUSINESS LITIGATION: CLAIMS ALLEGING FRAUDULENT INDUCEMENT TO BUY A BUSINESS

By Mavrick Law Firm

In some business sales, buyers later discover material misrepresentations made by the seller to induce purchase of the business. However, there also are cases of “buyer’s remorse,” where some buyers look for an illegitimate excuse to get out of a business deal they wish they did not make where there was no fault on the part of the seller. Florida courts carefully examine the wording of the parties’ written contract when assessing claims of fraud concerning purchase of a business. The wording of the purchase/sale agreement can provide strong protections for both buyer and seller. 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.

As explained by Florida’s Fourth District Court of Appeal in Lou Bachrodt Chevrolet, Inc. v. Savage, 570 So.2d 306 (Fla. 4th DCA 1990), to establish a claim of fraud in the inducement, the buyer of a business must prove the following:

(1) the seller misrepresented a material fact;

Continue reading →

Published on: December 28, 2021

FORT LAUDERDALE TRADE SECRET LAW: COURTS REQUIRE THAT TRADE SECRET BE DISCLOSED WITH “REASONABLE PARTICULARITY”

By Mavrick Law Firm

In business litigation over alleged misappropriation of trade secrets, parties frequently dispute the legal requirement that the allegedly misappropriated trade secrets be disclosed with “reasonable particularity.” Florida and federal courts generally hold that when a plaintiff asks the court to find that trade secrets exist and that the defendant misappropriated those trade secrets, the plaintiff must reveal the information it ultimately seeks to protect. Peter Mavrick is a Fort Lauderdale trade secret attorney, and also represents clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in business litigation, non-compete agreement litigation, employment litigation, trademark litigation, and other legal disputes in federal and state courts and in arbitration.

Because lawsuits alleging trade secret misappropriation are often between business competitors, it is understandable that the plaintiff business does not want the defendant business rival to understand the full scope of the misappropriated trade secret. However, Florida and Federal courts require disclosure of the relevant trade secrets to the defendant, with “reasonable particularity,” because the defendant will need to know this information to have a fair ability to defend against the lawsuit. For example, in Bestechnologies, Inc. v. Trident Environmental System, Inc., 681 So.2d 1175 (Fla. 2d DCA 1996), the Florida appellate court in a trade secrets misappropriation case denied a petition to vacate, i.e., overturn, an order compelling deposition testimony. In the course of the business litigation, the rival business sought to obtain evidence that the plaintiff business’ processes were not trade secrets, but rather, were common processes known throughout the industry. The Judge in the trial court had ordered the plaintiff business to produce to the defendant discovery related to this issue, but the Judge ordered that the discovery must remain confidential. The appellate court held that the defendants were allowed to know whether the plaintiff’s competitors were aware of the plaintiff’s processing techniques, so long as the trial court took measures to protect the alleged trade secrets.

Sometimes plaintiffs suing for trade secrets misappropriation resist disclosing trade secrets information on the grounds that the information is privileged as a trade secret Florida has a statutory trade secrets privilege set forth in § 90.506, Florida Statutes. Florida’s Fourth District Court of Appeal, i.e., the appellate court governing Broward County, Florida, has held that “[w]hen the trade secret privilege is asserted as the basis for resisting production, the trial court must determine whether the requested information constitutes a trade secret; if so, the court must require the party seeking production to show reasonable necessity for the requested materials.” American Express Travel Related Svcs., Inc. v. Cruz, 761 So.2d 1206 (Fla. 4th DCA 2000). The appellate court explained that “[t]he burden is on the party resisting discovery to show ‘good cause’ for protecting or limiting discovery by demonstrating that the information sought is a trade secret or confidential business information and that disclosure may be harmful.” However, a plaintiff who sues for trade secrets misappropriation will generally waive the right to assert the trade secrets privilege. In Del Monte Fresh Produce Company v. Dole Food Company, Inc., 14 F.Supp.2d 1332 (S.D. Fla.), the United States District Court for the Southern District of Florida explained that “[t]he common factor in all of the trade secret privilege cases is that the parties opposing production have asserted the privilege because they claim that the trade secrets re not at issue in their cases. In the instant case, the opposite is true … [because] the trade secrets are the ultimate issue to be decided by the court. By bringing a claim under the Uniform Trade Secrets Act, and thereby placing the trade secrets at issue, Del Monte essentially waived its right to assert the trade secrets privilege.” Fundamentally, the trade secrets privilege does not apply in cases where the primary questions to be resolved are whether a trade secret exists and whether it was misappropriated.

Continue reading →

Published on: December 26, 2021

MIAMI NON-COMPETE AGREEMENTS: WHEN COURTS WILL ISSUE AN INJUNCTION TO PROTECT AN EMPLOYER

By Mavrick Law Firm

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 litigation, trademark 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.

Continue reading →

Published on: December 21, 2021

FORT LAUDERDALE BUSINESS LITIGATION: FORENSIC EXAMINATIONS OF ELECTRONIC DEVICES

By Mavrick Law Firm

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.

Continue reading →

Published on: December 17, 2021

FORT LAUDERDALE BUSINESS LITIGATION: RESOLVING CORPORATE DEADLOCK WITH A PROVISIONAL DIRECTOR

By Mavrick Law Firm

Many Florida corporations are owned or controlled by two individuals who have equal authority. While 50/50 control over a corporation can sometimes work for a time, it is often not sustainable. When a conflict arises between two equal owners of a corporation, there is usually not an easy solution to fix the deadlock. A co-owner of a corporation in deadlock can take action in Court to resolve the deadlock. 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 as well as in arbitration.

If the board of directors for a Florida corporation is deadlocked, a co-owner of that corporation can request that the court appoint a provisional director to resolve the deadlock. Under Florida law, a court has discretion to appoint a provisional director to a corporate entity “if it appears that such action by the court will remedy a situation in which the directors are deadlocked in the management of the corporate affairs and the shareholders are unable to break the deadlock.” Fla. Stat. § 607.0749(1). “A ‘deadlock’ . . . is a standstill—a state of inaction or of neutralization caused by the opposition of persons or of factions.” Kertesz v. Spa Floral, LLC, 994 So. 2d 473 (Fla. 3d DCA 2008). Where corporate deadlock exists, the court may exercise this discretion “in a proceeding by a shareholder,” and is not otherwise limited by the nature of the action. Fla. Stat. § 607.0749(1). Even if there is not a vacancy on the Florida businesses’ board of directors, the court can appoint this provisional director, who will have “all the rights and powers of a duly elected director, including the right to notice of and to vote at meetings of directors.” Id. The court’s chosen provisional director “shall be an impartial person who is neither a shareholder nor a creditor of the corporation or of any subsidiary or affiliate of the corporation, and whose further qualifications, if any, may be determined by the court.” Id.

The courts do not automatically appoint provisional directors in every circumstance when there is a corporate deadlock. In business litigation over whether to intervene in a Florida corporation’s internal governance, courts often evaluate how significant is the management dysfunction. See Fernandez v. Yates, 145 So. 3d 141 (Fla. 3d DCA 2014) (“With half of the shareholder/partners refusing to even meet with the remaining shareholder/partners to consider how to address the needs of the property so that its purpose may continue to be realized and with the entrenched manager/son of one of the recalcitrant shareholder/partners taking direction from less than a majority of the shareholder/partners, it is impossible to see how ‘irreparable injury’ to [the corporation] has not been suffered, much less been threatened”). In Yates, Florida’s Third District Court of Appeal dissolved a corporate entity as a result of dysfunctional management and irreconcilable shareholder deadlock. Id. (finding the company’s shareholders “unable to break a corporate deadlock” which “irreparably frustrate[d] the very purpose of [the] corporation”). Because the “shareholders/partners [were] hopelessly deadlocked on every issue,” Yates held that dissolving the corporation was the best option to avoid irreparable injury. Id. The appointment of a provisional director is a tool that can be utilized by the court to remedy this dysfunctional structure before the Florida corporation reaches the point where the only remaining option is dissolution.

Continue reading →

Published on: December 14, 2021

FORT LAUDERDALE TRADE SECRET LAW: CUSTOMER LISTS AS TRADE SECRETS

By Mavrick Law Firm

A Florida business’ list of customers can be its most valuable asset. Often, disgruntled employees try to leave and start a new business with their former employer’s customer list. These disgruntled employees can often use customer information to undercut their former employer, without spending the money that the former employer took to get that information. An employer that carefully protects its customer list may be able to sue for damages and to recover its customer list pursuant to the Florida Uniform Trade Secret Act (FUTSA) or the federal Defend Trade Secrets Act (DTSA). Peter Mavrick is a Fort Lauderdale trade secret attorney, and also advocates for clients in Palm Beach, Boca Raton, and Miami, Florida. The Mavrick Law Firm represents clients in business litigation, non-compete agreement litigation, employment litigation, trademark litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

Information, such as a customer list, is protectable as a trade secret if the information meets certain elements. DTSA and FUTSA have nearly identical definitions of “trade secret.” Under both statutes, information may be a trade secret if (a) is subject to reasonable measures for maintaining the information’s secrecy; and (b) derives independent economic value from not being generally known or readily ascertained through proper means by, another person. See 18 U.S.C. § 1839(3) (defining trade secret under DTSA); § 688.002(4), Fla Stat. (defining trade secret under FUTSA).

Customer lists are often comprised of publicly available information, like names, addresses, and phone numbers. Nevertheless, there is federal court precedent holding that compilations of information may qualify as a trade secret, even though the information compiled would not qualify as a trade secret alone. Capital Asset Research Corp. v. Finnegan, 160 F.3d 683 (11th Cir. 1998) (“Even if all of the information is publicly available, a unique compilation of that information, which adds value to the information, also may qualify as a trade secret”); Compulife Software Inc. v. Newman, 959 F.3d 1288 (11th Cir. 2020) (“Even if [the] quotes aren’t trade secrets, taking enough of them must amount to misappropriation of the underlying secret at some point”).

Continue reading →