FLORIDA NON-COMPETE LITIGATION: PRESUMPTION OF IRREPARABLE HARM CAN BE REBUTTED BY DEMONSTRATING ABSENCE OF INJURY

Peter Mavrick is a Fort Lauderdale non-compete attorney who regularly represent entrepreneurs who formerly were employed in a certain industry and are now seeking to start their own business in the same industry. Our law firm is often confronted with non-compete covenants, otherwise known as restrictive covenants, signed by the entrepreneur when he or she was employed with his or her former employer. According to subsection (j) of Florida’s Non-Compete Covenant Statute, § 542.335, “[a] court shall enforce a restrictive covenant by any appropriate and effective remedy, including, but not limited to, temporary and permanent injunctions. The violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant.” In other words, irreparable harm to a former employer’s business will be presumed for the issuance of an injunction if the former employee has violated an enforceable restrictive covenant. Mr Mavrick has successfully defended many entrepreneurs against lawsuits filed by their former employer seeking injunctions to enforce applicable non-compete covenants. Although Florida courts apply the presumption of irreparable harm, the presumption can be rebutted if the entrepreneur can establish “absence of an injury,” as demonstrated in TransUnion Risk & Alternative Data Sols., Inc. v. Challa, 676 Fed. Appx. 822 (11th Cir. 2017).

In TransUnion, a data fusion company appealed a federal trial court’s denial of a motion for temporary injunction against a former employee who resigned and went on to work for a competitor. During his employment, the former employee gained knowledge regarding some of the data fusion company’s proprietary information. Thus, the data fusion company argued that employee’s mere presence at the competitor created an “irreparable injury,” irrespective of the likelihood that the employee actually would disclose the company’s proprietary information or the imminence of actual disclosure. Although the presumption of irreparable injury was applied in favor of the company, the federal appellate court (interpreting Florida law) held that the employee sufficiently established absence of an injury, satisfying his burden to rebut the presumption of irreparable harm. In doing so, the federal appellate court deferred to the trial court’s findings. Specifically, the trial court credited the employee’s testimony that he has not and would not use or disclose any of the company’s proprietary information while working at the competitor. In addition, the trial court found credible the employee’s explanation of the nature of his position, which was substantially different from his former position at the data fusion company. Furthermore, the employee’s discussion of the information he relied upon in his day-to-day work at the competitor, the experience he gained outside of his employment at the company, and the reasons why he had no need for the company’s confidential and proprietary information in his position at the competitor were also given credence by the trial court. The trial court also found persuasive the testimony of witnesses presented by both parties indicating that the data fusion industry is rapidly evolving. This rapid evolution minimized the usefulness of proprietary knowledge the employee possessed, which at the time of the federal trial court’s decision was at least 14 months old. Based on the foregoing, the federal appellate court affirmed the trial court’s order denying the motion for temporary injunction.

As demonstrated by TransUnion, circumstances may arise where a former employer will rely on the presumption of irreparable harm for an injunction despite the lack of any real injury to the employer. In such cases, the burden shifts to the former employee to present evidence showing absence of injury. If the employee is successful in doing so, the court should not enter an injunction against the employee. If you are an entrepreneur involved in non-compete litigation with a former employer or if you simply would like more information regarding non-compete covenants in Florida, Peter Mavrick is a Fort Lauderdale non-compete lawyer who can assist you.

The Fort Lauderdale non-compete litigation attorneys at the Mavrick Law Firm have successfully represented many individuals and businesses in Florida non-competition covenant litigation in the Miami-Dade, Broward, and Palm Beach County areas encompassed by the Third and Fourth District Courts of Appeal, as well as Hillsborough, Sarasota, and other counties encompassed by the Second Circuit Court of Appeal. 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.