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Articles Tagged with West Palm Beach Non Compete Attorney

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The Mavrick Law Firm regularly represents entrepreneurs who open businesses in industries in which they were formerly employees. As such, often times we are confronted with covenants not to compete signed by the entrepreneur when he or she was employed with his or her former employer. The restrictive covenants will usually restrict the entrepreneur from competing with the former employer for a certain time period and within a specific geographic area. The Mavrick Law Firm has, on several occasions, successfully defended entrepreneurs from lawsuits seeking to enforce such covenants. One way we have successfully defended against these claims is by asserting that the plaintiff has committed some sort of wrongdoing or has engaged in improper conduct that prevents the plaintiff from enforcing the covenant not to compete at issue, otherwise known as the “unclean hands” doctrine.

The unclean hands doctrine is an equitable defense that precludes a plaintiff from recovering in equity due to some sort of wrongdoing or improper conduct on the part of the plaintiff. Peter Mavrick is a Miami non-compete lawyer who has won non-compete litigation in Miami-Dade Circuit Court through the unclean hands affirmative defense. Although “unclean hands” is a defense exclusive to claims seeking equitable relief, it has proven to be very useful in the employment context, particularly in cases where an employer is seeking to enforce a covenant not to compete. Under Florida law, if a former employer engaged in wrongdoing that caused the entrepreneur’s separation from employment, then the employer will be precluded from enforcing a covenant not to compete against the former employee. Such was the case in Bradley v. Health Coal., Inc., 687 So. 2d 329 (Fla. 3d DCA 1997).

In Bradley, the defendant was employed as a salesperson for the plaintiff’s blood plasma products and signed a covenant not to compete contained within his employment contract. After the defendant’s employment with plaintiff ended, plaintiff sought to enforce the covenant not to compete once it discovered that the defendant had subsequently gone to work for a competitor. The trial court enforced the covenant not to compete and entered an injunction against the defendant. However, in entering the injunction, the trial court declined to consider the defendant’s defense that there should be no injunction because defendant was forced to resign from his employment with plaintiff after he refused the plaintiff’s instructions to engage in improper business practices. Specifically, defendant contended he refused to resell certain plasma products that had been returned by a customer because he felt they were unsafe for medical use due to the handling during shipping. Furthermore, defendant asserted that he refused to obey an instruction to alter certain invoices to charge higher prices than the customers had agreed to.

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Florida law requires that courts read non-competition covenants in favor of providing reasonable protection to a company’s legitimate business interest and prohibits courts from reading the non-competition covenant narrowly against the restraint.  Anarkali Boutique, Inc. v. Ortiz, 104 So. 3d 1202 (Fla. 4th DCA 2012) provides an example of just how broadly Florida courts could read a non-competition agreement.

In Anarkali, a worker entered into a non-competition covenant with a company in 2008 as part of an employment agreement.  The non-competition covenant restricted the worker from competing with the company for a 2-year term beginning when the worker is “no longer employed by Company.”  Anarkali Boutique, Inc., 104 So. 3d at 1203.  In 2009, the worker’s status with the company changed from employee to independent contractor.  Two years later, in 2011, the worker left the company and opened a competing business.  The company sued to enforce the non-competition covenant.

The trial court found that because the 2-year term of the non-competition covenant would begin to run when the worker was “no longer employed by Company,” the 2-year term began to run in 2009, i.e., when the worker ceased being an employee of the company.  Consequently, the 2-year term expired in 2011, i.e., before the worker opened her own competing business.  Therefore, the trial court held that the non-competition covenant had expired and the company could not now enforce the non-competition covenant.  On appeal, the appellate court disagreed.

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Generally, under Florida statutory law, restrictive covenants, e.g., non-competition covenants, must be signed by the person against whom the covenant will be enforced.  A restrictive covenant cannot be enforced against an individual who did not sign the restrictive covenant.

In Winn-Dixie Stores, Inc. v. Dolgencorp, Inc., 964 So. 2d 261 (Fla. 4th DCA 2007), Winn-Dixie Stores, Inc. (“Winn-Dixie”) entered into a lease with a landlord that granted Winn-Dixie the exclusive right to sell groceries at a particular shopping plaza.  The restrictive covenant in the lease stated that other stores in the plaza could sell groceries only if they did not devote more than 500 square feet to those groceries.  Thereafter, Dolgencorp, Inc. (“Dolgencorp”) leased a location at the plaza and devoted more than 500 square feet to grocery items.  Winn-Dixie sued to enforce the restrictive covenant.  Dolgencorp argued that because it never signed the restrictive covenant, the covenant could not be enforced against Dolgencorp under Florida law.  While the trial court agreed with Dolgencorp, the appellate court found that the restrictive covenant was enforceable against Dolgencorp even though Dolgencorp never signed the covenant.  The appellate court’s decision is rooted in the distinction between personal covenants and real covenants.

A personal covenant is a provision in a contract that creates personal contractual obligations.  For example, a restrictive covenant contained in an employment agreement is a personal covenant.  On the other hand, a real covenant is a provision contained in transaction involving real property—for example, a restrictive covenant contained in a lease of real property.  Generally, if a real covenant touches and  involves the land and was meant to bind all subsequent purchasers of the land, then the real covenant is said to “run with the land” and will bind all subsequent purchasers or lessees of the land who had notice of the covenant.

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