MIAMI BUSINESS LITIGATION: TRADE SECRETS AND FORUM SELECTION CLAUSES

“Parties to a contract may stipulate to a particular forum in which to resolve future disputes.” Rudman v. Numismatic Guar. Corp. of Am., 298 So. 3d 1212 (Fla. 3d DCA 2020). These clauses are known as forum selection clauses and presumed to be valid unless the party resisting enforcement can demonstrate the clause is unjust or unreasonable. W. Bay Plaza Condo. Ass’n, Inc. v. Sika Corp., 338 So. 3d 32 (Fla. 3d DCA 2022) (“Forum selection clauses should be enforced in the absence of a showing that enforcement would be unreasonable or unjust.”). 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.

There are two types of forum selection clauses – mandatory and permissive. A mandatory clause exits when the plain contract language indicates that the pre-selected forum is the exclusive place of to litigate disputes. Espresso Disposition Corp. 1 v. Santana Sales & Mktg. Group, Inc., 105 So. 3d 592 (Fla. 3d DCA 2013) (The “clause is mandatory where the plain language used by the parties indicates ‘exclusivity.’”). For instance, a forum selection clause providing that the venue for any action relating to a controversy under the agreement “shall be the State of Illinois” is mandatory because the clear language unequivocally limits the forum to Illinois. By contract, permissive forum selection clauses enable contracting parties to litigate in a pre-selected forum but do not require litigation to occur in that forum pre-selected exclusively. Golden Palm Hosp., Inc. v. Stearns Bank Nat. Ass’n, 874 So. 2d 1231 (Fla. 5th DCA 2004) (A “permissive forum selection clause may provide an alternative to the statutory choices of venue but it does not require the plaintiff to file the suit in the forum referred to in the agreement.”). An example of a permissive forum selection clause could include language to effect of “this Purchase and Sale Agreement has been made and is performable in West Palm Beach, Palm Beach County, Florida. See Intercapital Funding Corp. v. Gisclair, 683 So. 2d 530 (Fla. 4th DCA 1996).

The distinction between mandatory and permissive forum selection clauses is important because courts are required to enforce mandatory forum selection clauses but are not required to enforce permissive forum selection clauses. Garcia Granados Quinones v. Swiss Bank Corp. (Overseas), S.A., 509 So. 2d 273 (Fla. 1987) (“We thus hold that the trial court may properly exercise its discretion by refusing to enforce a choice-of-forum clause found to be permissive and not mandatory.”). Consequently, courts can choose whether to enforce permissive forum selection clauses.

Enforcement of a forum selection clause may also depend on the subject matter of the lawsuit and the scope of the clause. Forum selection clauses limited only to “this Agreement” may not be enforced if the disputed subject is unrelated to the agreement. This is exactly when happened in a trade secret lawsuit captioned Zemcar, Inc. v. Uber Tech, Inc., Case No. 2484CV01525-BLS2 (Suffolk Sup. Ct. Mass., Jan. 29, 2025). The plaintiff and defendant entered an agreement containing the following forum selection clause:

This Agreement shall be governed by and construed in accordance with Brazilian laws without regard to its choice of laws provisions. [Zemcar] hereby consents to exclusive jurisdiction and venue in the state courts sitting in [São Paolo, Brazil].

The Court determined the forum selection clause did not require Zemcar to pursue its trade secret claims in Brazil. More specifically, the court reasoned that the “second sentence does not identify the nature of the disputes subject to that exclusive jurisdiction,” and further reasoned that the second sentence “follows the sentence that provides that the Agreement would be governed by Brazilian law.” These two factors caused the court to conclude that Zemcar “consented to the exclusive jurisdiction of the courts of São Paolo, Brazil for the resolution of claims that ‘have their inception’ in the 2020 [contract] not claims or disputes that precede the contract, merely relate to the [contract], or stem… from the relationship of the parties.”

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.