Category: Non-Compete Law

FLORIDA LAW ON NON-COMPETITION COVENANTS: REWRITING CONTRACTUAL TERMS

Florida statutes on non-competition covenants allow courts to modify overbroad non-competition covenants.  For example, a non-competition covenant restricting an employee from competing against the employer in every county in Florida is likely overbroad if the employer conducts business only in Broward County.  Florida statutes, however, allow the court to modify such overbroad non-competition covenants and grant “reasonably necessary” relief, i.e., modify the covenant to apply only to Broward County.

Under Florida contract law, however, courts generally will not rewrite the terms of a contract.  Although Florida statutory law allows courts to modify overbroad non-competition covenants, Florida courts have otherwise refrained from rewriting non-competition covenants.

In Advantage Digital Sys. v. Digital Imaging Servs., 870 So. 2d 111 (Fla. 2d DCA 2003), two employees were bound by non-competition covenants that restricted them from “soliciting” the employer’s customers.  The trial court found the non-competition covenants enforceable and ordered that the employees were prohibited from “having any contact, whatsoever, with any customers of [the employer].”  Advantage Digital Sys., 870 So. 2d at 114-15.  On appeal, the appellate court disagreed with the trial court’s order.  The appellate court held that the trial court’s order went “far beyond prohibiting solicitation” and “essentially and impermissibly rewrites the parties’ agreements by disallowing any ‘contact’ with [the employer’s] customer.  …  Because the noncompetition agreements prohibit only solicitation, that is the only activity that can be the subject” of the court’s order.  Advantage Digital Sys., 870 So. 2d at 115.

More recently, in Heiderich v. Fla. Equine Veterinary Servs., 86 So. 3d 527, 530 (Fla. 5th DCA 2012), Dr. Heiderich, a veterinarian, signed a non-competition covenant with her employer, which restricted her from owning or being employed by any veterinary practice located within a 30-mile radius of the employer’s place of business.  After ending her employment, Dr. Heiderich started her own veterinarian practice outside the 30-mile radius of the non-competition covenant.  However, Dr. Heiderich delivered her veterinarian services to customers within the 30 mile radius.  The former employer sued to enforce the non-competition covenant and argued that the covenant prohibited Dr. Heiderich from “practicing” veterinarian services within the 30-mile radius.  While the trial court agreed with the employer, the appellate court disagreed.

The appellate court in Heiderich held that the non-competition covenant restricted Dr. Heiderich only from owning or being employed by a veterinarian practice located within the 30-mile radius; it did not restrict her from practicing veterinarian services within the 30-mile radius.  Because Dr. Heiderich opened her business outside the 30-mile radius, she did not breach the non-competition covenant.

As discussed in a previous article, Florida law requires that courts read non-competition covenants in favor of providing reasonable protection to a company’s legitimate business interests.  However, as the above cases demonstrate, Florida courts generally will not grant protection beyond what the terms of a non-competition covenant provide.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

FLORIDA LAW ON NON-COMPETITION COVENANTS: THE REQUIREMENT THAT COVENANTS BE READ IN FAVOR OF REASONABLE PROTECTION

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.

The appellate court found that the worker’s change from employee to independent contractor did not cause the 2-year non-competition period to begin running.  Instead, the non-competition period began to run when the worker left the company in 2011.  The appellate court based its decision in part on Florida statutory law that requires courts to read non-competition covenants “in favor of providing reasonable protection to all legitimate business interests” and prohibits courts from reading non-competition covenants “narrowly, against the restraint, or against the drafter of the contract.”  Fla. Stat. § 542.335(1)(h).  Reading the agreement in accordance with Florida law, the appellate court held that the “obvious purpose” of the non-competition agreement “was to preclude the worker from competing with the company after the company trained the worker and allowed her to build her own clientele.  It would be unreasonable to construe the contract as having the two-year non-compete period begin to run while the company still was employing the worker as an independent contractor … but have the non-compete period expire just before the worker leaves the company to start her own competing business.  To hold otherwise would lead to absurd conclusion.”  Anarkali Boutique, Inc., 104 So. 3d at 1205.

For employees, the Anarkali decision provides an example of how broadly courts will read a non-competition covenant.  Florida law on non-competition covenants, unlike the law in other states, forbids courts from reading non-competition covenants narrowly.  Consequently, Florida law on non-competition covenants tends to be employer-friendly.  As explained in a previous article, had the same facts been presented before a court in another jurisdiction, the outcome might have differed.

For employers, Anarkali serves as yet another example of how proper drafting could prevent incurring substantial legal fees.  Although the non-competition covenant in Anarkali was read in favor of the company, the company prevailed only at the appellate level.  Had the employment contract included a provision regarding the worker’s change to independent contractor status, the argument in Anarkali could have been avoided.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

RESTRICTIVE PERSONAL COVENANTS VS. RESTRICTIVE REAL COVENANTS

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.

The appellate court in Winn-Dixie Stores, Inc. found that the covenant contained in Winn-Dixie’s lease “ran with the land.”  The restrictive covenant touched and involved the land because it affected the mode and enjoyment of the land.  The restrictive covenant also was meant to bind all subsequent purchasers and lessees because the lease contained a provision stating that “it is a covenant running with the land.”  Winn-Dixie Stores, Inc., 964 So. 2d at 264.  Finally, because Dolgencorp is an experienced commercial tenant with 7,800 stores in 32 states, “Dolgencorp had reason to know of the existence of Winn-Dixie’s restrictive covenant,” and therefore had sufficient notice.  Winn-Dixie Stores, Inc., 964 So. 2d at 266.  Because the restrictive covenant was a real covenant that ran with the land, it could be enforced against Dolgencorp even though Dolgencorp never signed the restrictive covenant.

More recently, Big Lots Stores, Inc. attempted a similar argument against Winn-Dixie’s enforcement of its restrictive covenants in Winn-Dixie Stores, Inc. v. Dolgencorp, LLC, 2014 U.S. App. LEXIS 4143 (11th Cir. Mar. 5, 2014).  The federal appellate court, applying Florida law, held that because Winn-Dixie’s restrictive covenant was a real covenant that ran with the land, courts can “enforce a covenant running with the land against non-signatory co-tenants.”  Winn-Dixie Stores, Inc., 2014 U.S. App. LEXIS 4143, at *73.

The above cases serve as a reminder that Florida law on restrictive covenants recognizes a distinction between personal covenants and real covenants.  While restrictive personal covenants must be contained in a writing signed by the person against whom the covenant will be enforced, restrictive real covenants that run with the land can be enforced against co-tenants who have not signed the restrictive covenant.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

FLORIDA LAW ON NON-COMPETITION COVENANTS AND CHOICE OF LAW PROVISIONS

Florida law tends to favor enforcement of non-competition covenants.  Under Florida law, non-competition covenants are enforceable if they protect one or more legitimate business interests and if they are reasonable in time, area, and line of business.  In fact, Florida law explicitly forbids courts from considering “any individualized economic or other hardship that might be caused to the person against whom enforcement is sought” when determining whether a non-competition covenant is enforceable.  Fla. Stat. § 542.335(g)(1).

For those reasons, companies might wish to take advantage of Florida’s non-competition laws even when the non-competition contract will be enforced outside of Florida.  In those situations, companies will likely include a “choice of law” provision in their non-competition covenants.  Generally, a “choice of law” contractual provision allows the parties to decide which state’s laws should apply to the contract.

Consider the following example:  A Florida corporation conducts business in New York.  To protect its legitimate business interests, the Florida corporation enters into a non-competition contract with its New York employee.  However, New York’s laws do not favor non-competition covenants to the same extent that Florida’s laws do.  New York law requires courts to consider whether the non-competition contract would impose undue hardship on the employee, a consideration that is forbidden under Florida law.  To take advantage of the Florida law, the Florida corporation includes a “choice of law” provision in the non-competition contract stating that Florida law shall apply to the contract.  That is exactly what a Florida corporation did in Brown & Brown, Inc. v Johnson, 980 N.Y.S.2d 631, 637 (N.Y. App. Div. 4th Dep’t 2014).  The New York appellate court, however, found that New York law, not Florida law, applied to the non-competition contract notwithstanding the contract’s “choice of law” provision.

Under New York law, a “choice of law” provision will be upheld if it bears a reasonable relationship to the parties or the transaction and if it is not “truly obnoxious” to New York’s public policy.  Considering New York’s public policy, the court in Brown & Brown, Inc. refused to uphold the “choice of law” provision and held that New York law will apply to the non-competition contract.  Specifically, the New York court found that “Florida law prohibiting courts from considering the hardship imposed on the person against whom enforcement is sought is ‘truly obnoxious’ to New York public policy.”  Brown & Brown, Inc., 980 N.Y.S.2d at 638.

New York was not the first state to find that Florida non-competition law was contrary to the respective state’s public policy.  In 2012, a Georgia appellate court found that “applying Florida law, the [the non-competition] covenants would almost certainly be upheld, despite the fact that they violate applicable Georgia law.”  Carson v. Obor Holding Co., LLC, 318 Ga. App. 645, 654 (Ga. Ct. App. 2012).  Consequently, the Georgia court held that the non-competition contract’s forum-selection clause selecting Florida as the forum state was unenforceable because Florida non-competition law was against Georgia public policy.

Likewise in 2008, an Illinois appellate court found that “Florida law, which specifically prohibits considering the hardship a restrictive covenant imposes upon an individual employee, is contrary to Illinois’s fundamental public policy.”  Brown & Brown, Inc. v. Mudron, 379 Ill. App. 3d 724, 728 (Ill. App. Ct. 3d Dist. 2008).  The Illinois appellate court therefore found that Illinois law applied to the non-competition contract despite the contract’s “choice of law” provision.  In 2001, a federal court in Alabama also refused to uphold a “choice of law” provision in a non-competition contract because it found that Florida non-competition law was “antithetical to Alabama’s general policy against covenants not to compete.”  Unisource Worldwide, Inc. v. S. Cent. Ala. Supply, LLC, 199 F. Supp. 2d 1194, 1201 (M.D. Ala. 2001).

As the above cases show, Florida companies seeking to enforce a non-competition covenant outside of Florida might not be able to take advantage of Florida’s non-competition laws even with a choice of law provision.  Because a choice of law provision cannot guaranty that Florida law will apply outside of Florida, proper drafting of the non-competition contract is key in those situations.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

RECENT FLORIDA CASE REVERSES TRIAL JUDGE REGARDING “INDEPENDENT” NON-COMPETITION COVENANT

Under Florida law, non-competition covenants are generally enforceable if they protect one or more legitimate business interest.  However, certain acts by the employer could defeat the enforceability of the non-competition covenant.  Under contract law, a party’s material breach of a contract will render the entire contract unenforceable against the other party.  In other words, if an employer materially breaches the employment contract—i.e., if the employer fails to pay wages or commissions in accordance with the employment contract—the employee will be released from the non-competition covenant.  There is an exception to that general rule: independent non-competition covenants.

If the non-competition provision of an employment contract is considered “independent,” then the employer’s breach of the employment contract will not affect the non-competition covenant’s enforceability.  Essentially, the independent non-competition covenant will be considered a separate contract.  A Florida district court recently shed some light on what contractual language would suffice to render a non-competition covenant “independent.”

In Richland Towers v. Denton, 2014 Fla. App. LEXIS 3472 (Fla. 2d DCA Mar. 12, 2014), an employer, Richland Towers, sued to enforce its non-competition covenants with two former employees who started a competing business.  Richland Towers, however, failed to pay those employees certain bonuses that were required under the employment contract.  The trial court found that Richland Towers’ failure to pay the contractually required bonuses constituted a prior material breach that essentially destroyed the entire employment contract and released the employees from the non-competition covenant.  The appellate court disagreed.

The appellate court held that the following two provision in the employment contracts rendered the non-competition covenants “independent”: (1) “Each restrictive covenant … shall be construed as a covenant independent of any other covenant”; and (2) “the existence of any claim or cause of action by the Employee against the Corporation … shall not constitute a defense to the enforcement by the Corporation of any other covenant.”  According to the appellate court, those two provisions made the non-competition covenants “independent.”

Every case is different, and a court’s construction of contractual terms depends on many factors.  However, as the court in Richland Towers found, if an employment contract contains express provisions that (1) the non-competition covenant is independent of other provisions and that (2) an employee’s claims against the employer will not constitute a defense to the enforcement of the non-competition covenant, then the non-competition covenant will likely be considered “independent.”

Peter T. Mavrick represents clients in non compete agreement cases in Fort Lauderdale, Palm Beach, and Miami Dade.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

 

NON-COMPETITION COVENANTS: THE EFFECT OF STOCK PURCHASES, MERGERS, AND ASSET PURCHASES UNDER FLORIDA LAW

Parties to contracts with non-competition covenants should take note of the effects that a stock purchase, merger, or asset purchase has on the enforceability of those non-competition covenants.  A company’s ability to enforce a non-competition covenant can be determined by several factors including how the non-competition covenant was acquired by the company seeking to enforce it.

Generally, when a corporation’s stock is sold, the only change is in the corporation’s ownership.  A change in ownership does not, as a matter of law, affect the existence of the corporation or its rights and liabilities.  Furthermore, when a corporation merges with another, both corporations essentially unite into a single corporate existence.  The surviving corporation therefore assumes the rights and liabilities of the merging corporation.  In both scenarios, the surviving corporation generally assumes the right to enforce any preexisting non-competition covenant.

On the other hand, when a corporation’s assets are sold, the buying corporation does not assume the liabilities of the selling corporation unless such assumption is provided for in the parties’ purchasing agreement.  In this scenario, the buying corporation does not, as a matter of law, assume the selling corporation’s non-competition covenants.

The Supreme Court of Florida examined this distinction in Corporate Express Office Products, Inc. v. Phillips, 847 So. 2d 406, 411 (Fla. 2003).  In that case, Corporate Express was attempting to enforce non-competition covenants against former employees.  Corporate Express’ ability to enforce those covenants, however, was determined by how it acquired the covenants.  Corporate Express acquired most of those non-competition covenants by purchasing the stock of another corporation and later merging with that corporation.  However, one of the covenants was acquired by purchasing the assets of a third corporation.

The Court found that, as a matter of law, Corporate Express assumed the right to enforce the non-competition covenants that it acquired through the stock purchase and merger.  However, Corporate Express could not enforce the covenant acquired through an asset purchase unless the employee subject to that covenant consented to assigning the covenant to Corporate Express.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

 

 

 

 

 

 

FLORIDA LAW ON NON-COMPETITION COVENANTS AND TRADE SECRETS

To protect trade secrets and other business interests, businesses often enter into non-competition contracts with employees.  In Florida, the duration of non-competition covenants is subject to different “reasonableness” presumptions set forth by statute.  Florida law distinguishes non-competition covenants that, on the one hand, are meant to protect trade secrets from those that, on the other hand, are meant to protect business interests other than trade secrets.

Where trade secrets are not at issue, Florida courts will presume as reasonable a non-competition covenant lasting six months or less.  A duration longer than two years, however, will be presumed unreasonable.  Fla. Stat. § 542.335(1)(d)(1).

By contrast, Florida law is more lenient when trade secrets are involved.  In such cases, courts view durations as long as five years as being presumptively reasonable.  A duration longer than ten years will be presumed unreasonable.  Fla. Stat. § 542.335(1)(e).  However, as a recent Florida case shows, a non-competition covenant designed to protect trade secrets will not automatically enjoy the longer reasonableness presumption.

In the recent case of Zodiac Records, Inc. v. Choice Environmental Services, LLC, 112 So. 3d 587, 589 (Fla. 4th DCA 2013), a former employer, Choice Environmental Services (“Choice”), sought to enforce a three-year non-competition covenant against a company started by its former consultant, Zodiac Records, Inc. (“Zodiac”).  The agreement between Choice and Zodiac included a non-competition covenant that was designed to protect Choice’s trade secrets.  The non-competition covenant restricted Zodiac from soliciting Choice’s customers and had a duration of three years beginning after the expiration of Choice and Zodiac’s agreement.  A little over two years after the agreement expired, Zodiac started a company and admitted to soliciting Choice’s customers.  Choice argued that the non-competition covenant’s three-year duration was presumably reasonable because it was designed to protect trade secrets.  The court disagreed.

During the hearing on Choice’s preliminary injunction, Choice’s attorney stated that he would not proceed under a trade secrets claim.  The court found that because Choice argued that it did not have to prove that Zodiac stole any trade secrets, Choice had effectively surrendered its ability to assert that the five-year term applied.  Thus, Choice’s non-competition covenant, even though it was designed to protect trade secrets, was not subject to the reasonableness presumption of five years.

This case highlights a couple of important points.  First, for the duration to be presumed reasonable, a non-competition covenant that lasts longer than two years must be predicated upon the protection of trade secrets.  Second, even a perfectly-drafted non-competition covenant will not warrant a reasonableness presumption of five years on its own unless there truly are trade secrets as opposed to the mere allegation that trade secrets exist.  The business seeking to enforce the covenant must show that it is protecting a genuine trade secret.  As the Zodiac court noted, customer lists do not automatically qualify as trade secrets.  To qualify as a trade secret, the business must present evidence that the customer list “was the product of great expense and effort, that it included information that was confidential and not available from public sources, and that it was distilled from larger lists of potential customers into a list of viable customers for [a] unique business.”  Zodiac Records, Inc. v. Choice Envtl. Servs., LLC, 112 So. 3d 587, 590 (Fla. 4th DCA 2013) (quoting East v. Aqua Gaming, 805 So. 2d 932, 934 (Fla. 2d DCA 2001)).  Customer lists will not qualify as trade secrets simply because a non-competition covenant characterizes them as such.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.

CUSTOMER RELATIONSHIPS AS TRADE SECRETS

Businesses enter into non-competition and confidentiality agreements with employees to protect trade secrets, which are usually in the form of specific practices, processes, designs, or a compilation of information.  The agreements are designed to deter misappropriation of the trade secrets after the employment relationship has ended.  The most frequent issue in non-competition or confidentiality agreement cases is establishing that a customer list constitutes a protectable trade secret, as opposed to a list that merely identifies commercially available information regarding the company’s clientele.

Florida appellate courts have explained that a former employer’s customer relationships do not automatically qualify as trade secrets.  This is so even when a party’s restrictive covenant attempts to nominally characterize them as trade secrets.  To qualify as a trade secret, there must be evidence that a customer list: (1) was the product of great expense and effort; (2) that it included information that was confidential and not available from public sources; and (3) that it was distilled from larger lists of potential customers into a list of viable customers for a unique business.

In East v. Aqua Gaming, 805 So.2d 932 (Fla. 2d DCA 2001), the former employee, i.e., Mr. East, used client lists obtained from his former employer, i.e., Aqua Gaming, to get the very business accounts that Aqua Gaming cultivated during Mr. East’s employment. The list included casinos, vendor names, telephone numbers, addresses, and client contacts compiled by Aqua Gaming over a number of years.  The customer list qualified as a trade secret because it was the product of Aqua Gaming’s great expense and effort, not available from public sources, and distilled from a larger list of potential customers into a list of viable customers for its gaming business.

By contrast, a customer list is not a trade secret when it is merely compiled from publicly available information.  In Sethscot Collection v. Drbul, 669 So.2d 1076 (Fla. 3d DCA 1999), plaintiffs sued to enjoin the defendant from utilizing a list of prospective customers.  The list contained the names of 9,600 social fraternities and sororities.  Since the information was obtained from commercial materials readily available to the public and not the product of any great expense or effort, it did not qualify as a trade secret.

However, the court in Sethscot enjoined the former employee from using his former employer’s “active” customer list as distinguished from its “prospective” customer list.  The active customer list contained the names of approximately 6,800 sororities and fraternities that actually ordered from the plaintiffs over the course of eight years.  The active customer list also contained detailed purchase history for each sorority and fraternity on the list.  While the former employee was barred from using the active customer list, he was still allowed to use contacts, expertise, and even customer lists he personally developed.

Peter T. Mavrick has successfully represented many businesses in trade secret and non-competition covenant litigation.  This article is not a substitute for legal advice tailored to a particular situation.  Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.