BUSINESSES CAN PROTECT THEIR TRADE SECRETS FROM DISCLOSURE BY FORMER EMPLOYEES DESPITE LACK OF A NON-COMPETE AGREEMENT

Florida’s Uniform Trade Secrets Act, Fla. Stat. Sections 688.001-688.009 (the “Act”), prohibits the misappropriation of a business’ trade secrets even if the business does not have a non-disclosure or similar agreement with the disclosing party. Misappropriation generally includes the improper possession of, or the disclosure of, a trade secret: “misappropriation” is fully defined in section 688.002, Fla. Stat. A business’ use of a non-compete agreement or non-disclosure agreement is the best way for a business to comprehensively protect its legitimate business interests in its trade secrets. However, even if a business does not have a valid non-compete agreement with an employee or a non-disclosure agreement with anyone, the Act prohibits the misappropriation of trade secrets and, where applicable, compensates the injured party for the theft and disclosure of its trade secrets. See Unistar Corp. v. Child, 415 So. 2d 733, 735 (Fla. 3d DCA 1982) (“lack of an agreement not to disclose a trade secret is not critical on the question of whether a plaintiff may enjoin [or seek damages for] its infringement”). If you have a trade secret litigation issue, Peter Mavrick is a Fort Lauderdale trade secret litigation lawyer who will assist you.

Section 688.003 of the Act allows Florida courts to enjoin a disclosing-party’s misappropriation of a trade secret. If the disclosing-party threatens to misappropriate the trade secret or actually does, the disclosing-party may be prevented from doing so. See Barberio-Powell v. Bernstein Liebstone Associates, Inc., 624 So. 2d 383, 384 (Fla. 4th DCA 1993) (“We recognize that a threatened misappropriation of trade secrets may be enjoined”). Section 688.003 of the Act provides that “[a]ctual or threatened misappropriation [of a trade secret] may be enjoined … for a … reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation. Thus, even if a business believes that its trade secrets are being misappropriated, or that they will be, a court can prevent the act as long as there are facts present to support an injunction. See Unistar Corp., 415 So. 2d at 734. Moreover, such injunctions can be in effect for as long as the trade secret is commercial advantageous.

In addition to injunctive relief, section 688.004 (1) of the Act allows injured businesses to recover damages for misappropriation so long as the injured party establishes that the misappropriation actually injured it. The Act does not authorize awards of nominal damages. See Alphamed Pharm. Corp. v. Arriva Pharm., Inc., 432 F. Supp. 2d 1319, 1335 (S.D. Fla. 2006) (citing Milgrim on Trade Secrets § 15.01 (“It is fundamental that even if defendant’s actual or threatened wrongful use is established, plaintiff must nonetheless establish that such use is to plaintiff’s detriment”)). However, the Act does enable plaintiffs to recover damages for the actual loss caused by the misappropriation. Actual losses “need only be “caused by” the misappropriation.” Premier Lab Supply, Inc. v. Chemplex Indus., Inc., 94 So. 3d 640, 646 (Fla. 4th DCA 2012). Thus, plaintiffs can measure their damage computations under a variety of methods: such as lost profits using a market share analysis, disgorgement of profits, unjust enrichment, or some other form of measurement that is casually linked to the misappropriation. Premier Lab Supply, Inc. 94 So. 3d at 645. The Act also allows for exemplary/punitive damages for “willful and malicious misappropriations” for “an amount not exceeding twice any award made under subsection (1).”688.004 (2), Fla. Stat.

In sum, the Act provides a safety net for businesses that are not protected by a non-compete or a non-disclosure agreement. As such, a business can seek injunctive relief that prevents a misappropriation. Additionally, a business may seek damages based on the actual loss caused by misappropriation. Businesses should make best efforts to ensure that their trade secrets are protected by entering into restrictive covenants with all who encounter their sensitive information. By engaging in this policy, businesses can prevent disclosure of valuable information that may not qualify for protection as a trade secret. For more information regarding trade secrets or restrictive covenants, see the firms practice area pages. Peter Mavrick is a Fort Lauderdale trade secret attorney who has substantial experience in prosecuting misappropriations for businesses throughout South Florida.

The Fort Lauderdale trade secret attorneys at the Mavrick Law Firm have successfully represented many businesses in Florida trade secret litigation in the, Broward, Miami-Dade and Palm Beach County areas encompassed by the Third and Fourth District Courts 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.