BOCA RATON NON-COMPETE AGREEMENTS: HOW FLORIDA COURTS ADDRESS “BALANCING OF HARMS”

Courts generally have discretion as to whether to grant an injunction to enforce a non-compete agreement. That discretion, however, does not allow courts to avoid enforcing a valid non-compete agreement which has been breached. Peter Mavrick is a Boca Raton non-compete attorney and business litigation attorney who has substantial experience with non-compete litigation, including injunction proceedings. The Mavrick Law Firm also practices non-compete litigation and business litigation in Fort Lauderdale, Palm Beach, and Miami.

An example of this occurred in Sarasota Beverage Co. v. Johnson, 551 So. 2d 503 (Fla. 2d DCA 1989), where the trial court denied a motion for temporary injunction because enforcement of the non-compete agreement would cost the former employee his livelihood. Sarasota Beverage Company (SBC), was a wholesale beer distributor in Sarasota and Manatee Counties and employed Donald Johnson (Johnson) as a route deliveryman. When Johnson began his employment with SBC, he signed a non-compete agreement, which applied to Sarasota and Manatee Counties. After Johnson resigned his employment, he accepted similar employment with Robert Blaikie & Sons, Inc. (Blaikie), a competitor wholesale beer distributor operating in Sarasota, Charlotte, and Lee Counties. Johnson’s initial delivery route with Blaikie was in Sarasota County. Because SBC sent a certified letter to Blaikie advising it that Johnson was in violation of the non-compete agreement. Blaikie ignored SBC. SBC filed a lawsuit seeking to enforce the non-compete agreement and moved for a preliminary injunction. At the evidentiary hearing on the motion for preliminary injunction, there was undisputed evidence that Blaikie assigned Johnson a delivery route primarily located in Charlotte County, but only after SBC filed the lawsuit. Johnson continued to service an account in Sarasota County in direct violation of the non-compete agreement.

The trial court denied the motion for preliminary injunction and made factual findings, which stated, in pertinent parts:

1. 3. As a result of this suit, Defendant Blaikie assigned Defendant Johnson to a route that was mainly in Charlotte County, although it has a “couple” of stops in the southern part of Sarasota County.
   4. Defendant Johnson’s job with Defendant Blaikie is his sole source of livelihood.
   5. The Plaintiff, under the above circumstances, has not shown that the threatened injury to it outweighs any possible harm to the Defendant Johnson. See Cordis Corporation v. Prooslin, 482 So.2d 486 (Fla. 3d DCA 1986).

SBC immediately appealed. The appellate court reversed the trial court’s decision. The appellate court held that a court is not empowered to refuse to give effect to a non-compete agreement because enforcement would cause an overly burdensome effect upon the employee. The appellate court further stated that an injunction should be granted when there is a clear violation of a reasonable covenant not to compete. The trial court relied on the Prooslin case, in which the court balanced the benefits to the employer against the detrimental effects on the former employee. Prooslin further balanced the threatened hardship to the former employee with the employer’s degree of likelihood of success on the merits. Florida courts, however, no longer include this balancing of the harms criteria as an element to be proved for the issuance of an injunction. See Sentry Ins. v. Dunn, 411 So.2d 336 (Fla. 5th DCA 1982); Silvers v. Dis–Com Securities, Inc., 403 So.2d 1133 (Fla. 4th DCA 1981).

The Florida Supreme Court in Capraro v. Lanier Business Products, Inc., 466 So.2d 212 (Fla. 1985), expressly approved Silvers. This recognized modification of the rule indicated that the balancing of the harms is inappropriate when considering a non-compete agreement. See Suave Shoe Corp. v. Fernandez, 390 So.2d 799 (Fla. 3d DCA 1980) (ordinary equity principles relating to the issuance of injunctions do not apply to non-compete agreements, because the trial judge’s discretion in such cases is limited to time and place restrictions).

Sarasota Beverage Co. v. Johnson held that in cases involving non-compete agreements, consideration of the impact on the former employee was only relevant when determining whether the non-compete agreement is reasonable as to time and area. Silvers v. Dis–Com Securities, Inc., 403 So.2d 1133, 1136 (Fla. 4th DCA 1981). The appellate court held that there was no indication in the record that the trial court determined that the contract was unreasonable as to time or area. Neither Johnson nor Blaikie contested the agreement’s limitations as to area or time.

Employment contracts containing non-compete agreements are enforceable in Florida. § 542.335, Fla. Stat.; Graphic Business Systems, Inc. v. Rogge, 418 So.2d 1084 (Fla. 2d DCA 1982). An injunction is a remedy for breach of a non-compete agreement. The trial court’s findings in this case were very limited, but it found that Johnson maintained a few stops in Sarasota County. The appellate court reversed the order denying the preliminary injunction and remanded the case back to the trial court to determine whether appellant breached the terms of the employment contract, and to enter a preliminary injunction to enforce the terms of the non-compete agreement.

Peter Mavrick is a Boca Raton non-compete lawyer who also practices non-compete litigation in Fort Lauderdale, Miami, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.