MIAMI BUSINESS LITIGATION: IRREPARABLE INJURY IS PRESUMED WHEN A RESTRICTIVE COVENANT IS VIOLATED

A plaintiff seeking permanent injunction must satisfy a four-factor test before a court can rule it is entitled to an injunction. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). The irreparable injury element is an important component of the injunction request and often precludes litigants from obtaining the injunction remedy because the evidence does not sufficiently demonstrate the existence of the element. See Liza Danielle, Inc. v. Jamko, Inc., 408 So. 2d 735 (Fla. 3d DCA 1982) (refusing to issue an injunction because the plaintiff failed to prove the irreparable harm element). The Miami business litigation attorneys of the Mavrick Law Firm represent 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.

The irreparable harm element may not be so consequential in restrictive covenant cases because Florida’s valid restraint of trade or commerce statute presumes irreparable injury exists when a restrictive covenant is violated. See Fla. Sat. § 542.335 (“The violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant.”). This presumption means the proponent of a restrictive covenant does not need to prove the irreparable injury element as would normally be the case. GFA Int’l, Inc. v. Trillas, 327 So. 3d 872 (Fla. 3d DCA 2021) (“The violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant…. Thus, a party seeking to enforce a restrictive covenant by injunction need not directly prove that the defendant’s specific activities will cause irreparable injury if not enjoined.”) (internal quotations omitted).

The presumption of irreparable injury does not mean the proponent of a restrictive covenant can sit on its laurels with respect to the irreparable harm element because the presumption is rebuttable. JonJuan Salon, Inc. v. Acosta, 922 So. 2d 1081 (Fla. 4th DCA 2006) (“Of course, the presumption of irreparable injury is rebuttable.”). Therefore, the party opposing enforcement can present evidence demonstrating no irreparable harm occurred, and if that party succeeds, he will defeat the presumption and prevent the court from issuing an injunction. See Don King Productions, Inc. v. Chavez, 717 So. 2d 1094 (Fla. 4th DCA 1998) (refusing to issue an injunction based on a restrictive convent because the defendant overcame the presumption of irreparable harm). To do this, the defending must demonstrate the absence of an injury. Smart Pharmacy, Inc. v. Viccari, 213 So. 3d 986 (Fla. 1st DCA 2016). But overcoming the presumption is difficult and does not happen often. For example, in Pitney Bowes Inc. v. Acevedo, No. 2008 WL 2940667 (S.D. Fla. July 28, 2008), the defendant argued that irreparable harmed should not be presumed because he stopped working for the competing business. The court rejected the defendant’s argument because it was not convinced the defendant would refrain from violating the restrictive covenant in the future.  

The Miami business litigation lawyers of the Mavrick Law Firm also represent 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.