MIAMI BUSINESS LITIGATION: ENFORCING FLORIDA’S TRADE SECRET ACT TO PREVENT EMPLOYEES FROM MISAPPROPRIATING EMPLOYER’S TRADE SECRETS

Trade secret misappropriation claims are commonly filed in business litigation by employers against former employees. An employee is precluded from using for his or her own advantage, and to the detriment of a former employer, any trade secrets obtained in the course of prior employment. East v. Aqua Gaming, Inc., 805 So. 2d 932 (Fla. 2d DCA 2001). Where an employee acquires, during the course of his or her employment, a special technique or process developed by his or her employer, the employer is under a duty, even in the absence of an express contractual provision, not to disclose such skills, techniques, or processes for the employee’s own benefit or another’s benefit to the detriment of the former employer. Premier Lab Supply, Inc. v. Chemplex Industries, Inc., 10 So. 3d 202 (Fla. 4th DCA 2009). Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, 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 there is no restrictive covenant between an employer and its employees, employers can sometimes prohibit former employees from disclosing confidential information under the Florida Uniform Trade Secrets Act (“FUTSA”). The lack of a confidentiality agreement does not necessarily defeat an employer’s argument that particular information is trade secret. Premier Lab Supply, Inc. v. Chemplex Industries, Inc., 10 So. 3d 202 (Fla. 4th DCA 2009). FUTSA mirrors the federal Uniform Trade Secrets Act, which also prohibits misappropriation of trade secrets and provides certain remedies. To obtain relief under FUTSA, the employer must prove: “(1) that it possessed a trade secret and took reasonable steps to protect its secrecy; and (2) the trade secret was misappropriated, either by one who knew or had reason to know the trade secret was improperly obtained or who used improper means to obtain it.” Mapei Corp. v. J.M. Field Marketing, Inc., 295 So. 3d 1193 (Fla. 4th DCA 2020).

Under FUTSA, “trade secret” is defined as “information, including a formula, pattern, compilation, program, device, method, technique, or process that: (a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” § 688.002, Fla. Stat. To be a trade secret under FUTSA, the information sought to be protected must be secret, and information that is generally known, or is necessarily disclosed upon use by a third party, cannot qualify as a trade secret. In re Maxxim Med. Group, Inc., 434 B.R. 660 (Bankr. M.D. Fla. 2010).

For purposes of FUTSA, “misappropriation” means:

(a) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (b) Disclosure or use of a trade secret of another without express or implied consent by a person who:

1. 1. Used improper means to acquire knowledge of the trade secret; or
   2. At the time of disclosure or use, knew or had reason to know that her or his knowledge of the trade secret was:
   3. Derived from or through a person who had utilized improper means to acquire it;
   4. Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
   5. Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
   6. Before a material change of her or his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

688.022, Fla. Stat. “Improper means” includes “theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” § 688.022, Fla. Stat. FUTSA permits injunctive relief in the following terms:

Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.

688.003, Fla. Stat.

An injunction under FUTSA is ordinarily for a specified period of time but can be extended under certain circumstances. Premier Lab Supply, Inc. v. Chemplex Indus., Inc., 94 So. 3d 640 (Fla. 4th DCA 2012). While “FUTSA may not be used as a vehicle to restrict competition[,]” FUTSA only “authorizes the injunction of specific identifiable trade secrets[.]” Norton v. Am. LED Tech., Inc., 245 So. 3d 968 (Fla. 1st DCA 2018). However, because injunctive relief can be obtained for threatened misappropriation, an employer does not need to wait for the former employee to “let the cat out of the bag” before an injunction can be obtained. Thomas v. Alloy Fasteners, 664 So. 2d 59 (Fla. 5th DCA 1995).

FUTSA is therefore an important tool for employers for many reasons. An employer need not have a noncompete in place to obtain an injunction prohibiting disclosure and use of its trade secrets. Unistar v. Child, 415 So. 2d 733 (Fla. 3d DCA 1982). In addition, a written confidentiality agreement is not required for an employer to obtain an injunction pursuant to FUTSA. Unistar v. Child, 415 So. 2d 733 (Fla. 3d DCA 1982). Moreover, irreparable harm and inadequate remedy at law are presumed. Dotolo v. Schouten, 426 So. 2d 1013 (Fla. 2d DCA 1983). Further, pursuant to FUTSA, “threatened” misappropriation is sufficient to obtain an injunction. Thomas v. Alloy Fasteners, 664 So. 2d 59 (Fla. 5th DCA 1995). As a result, when a former employee works for a competitor, the employer can obtain an injunction under FUTSA that will prohibit the employee from disclosing any trade secrets to the competitor and from working for the competitor for a “reasonable period” of time. Mapei Corp. v. J.M. Field Mktg., Inc., 295 So. 3d 1193 (Fla. 4th DCA 2020).

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.