Articles Posted in Business Litigation

Published on: December 14, 2022

FORT LAUDERDALE BUSINESS LITIGATION: CLAIMS OF UNFAIR COMPETITION UNDER FLORIDA LAW

Florida’s Deceptive and Unfair Trade Practices Act, commonly referred to as “FDUPTA,” prohibits “[u]nfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Florida Statutes section 501.204(1). A central feature of the statute is the statutory aim to protect consumers. A deceptive act involves a “representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment.” Zlotnick v. Premier Sales Group, Inc., 480 F.3d 1281 (11th Cir. 2007). To establish an unfair practice, the plaintiff must show that it is “one that ‘offends established public policy’ and one that is ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’” Marrache v. Bacardi U.S.A., Inc., 17 F.4th 1084 (11th Cir. 2021). In commercial disputes, businesses sometimes sue each other under FDUPTA claiming that harm that the defendant’s business caused the plaintiff’s business ultimately harmed consumers, and therefore allows the plaintiff to sue under FDUPTA. Claims under FDUPTA offer wider relief (such as injunctions, along with damages and recovery of legal expense from the defendant) and sometimes easier evidentiary burdens than other claims. In such cases, defendants are sometimes successful in defeating the claims on the grounds that no real consumer harm existed. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, 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 law, and other legal disputes in federal and state courts and in arbitration.

Florida’s appellate courts have held that non-consumers may assert claims for damages under FDUPTA. Caribbean Cruise Line, Inc. v. Better Business Bureau of Palm Beach County, 169 So.3d 164 (Fla. 4th DCA 2015). To state a claim for injunctive relief (i.e., a court order barring certain conduct), a plaintiff must allege: (1) a deceptive or unfair act or practice in trade; and (2) that plaintiff is a person “aggrieved” by the deceptive act or practice. To state a claim for damages under FDUPTA, a plaintiff must allege: “(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” Carriuolo v. General Motors Co., 823 F.3d 977 (11th Cir. 2016). However, to prove the first element for a claim for either damages or injunctive relief under FDUPTA, i.e., the existence of a deceptive or unfair practice, the plaintiff must prove that the relevant act or practice was harmful to a consumer. The appellate court in Caribbean Cruise Line explained that “while the claimant would have to prove that there was an injury or detriment to consumers in order to satisfy all the elements of a FDUPTA claim, the claimant does not have to be a consumer to bring the claim.”

Plaintiffs often try to fit their cases into a FDUPTA claim when there is no real harm to consumers, but instead harm only to the plaintiffs. For example, a recent case in the Eleventh Circuit Court of Appeals, CMR Construction and Roofing, LLC v. UCMS, LLC, 2022 WL 3012298 (11th Cir. 2022), affirmed a federal trial Judge’s decision to dismiss a construction service provider’s FDUPTA claim because it failed to allege harm to a consumer. The appellate court explained that: “CMR and UCMS were service providers that … provided … construction services to the Association. And CMR alleged that it was harmed because UCMS interfered with CMR’s ability to provide services to the Association, after CMR had already expended money and resources to perform the services. Because CMR alleged harm solely to itself—in its capacity as the construction service provider, and not to the consumer or its services—CMR failed to allege harm to a consumer.”

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Published on: December 10, 2022

MIAMI BUSINESS LITIGATION: PRESUMPTION OF IRREPARABLE INJURY IN NON-COMPETE LAWSUITS

By Mavrick Law Firm

Florida’s non-compete statute states in pertinent part, at Florida Statutes § 542.335(1)(j), that “[t]he violation of an enforceable restrictive covenant creates a presumption of irreparable injury.” There is a divergence, however, in the application of this presumption between Florida state courts and federal courts. Florida state courts routinely apply this presumption when the plaintiff proves violation of restrictive covenant (such as violations of covenants against competition, solicitation of customers, solicitation of employees, etc.). By contrast, federal courts generally take a much different approach. The United States Supreme Court in Amoco Prod. Co. v. Vill. Of Gambell, 480 U.S. 531 (1987), explained that presumptions of irreparable harm are “contrary to traditional [federal] equitable principles.” Peter Mavrick is a Miami business litigation lawyer, 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.

The United States Court of Appeals for the Eleventh Circuit, discussed application of this presumption in Vital Pharmaceuticals, Inc. v. Alfieri, 23 F.4th 1282 (11th Cir. 2022), including whether to follow Florida’s statutory presumption or follow earlier precedent barring such a presumption. The federal appellate court’s decision in Vital Pharmaceuticals referenced earlier Eleventh Circuit precedent in Proudfoot Consulting Co. v. Gordon, 567 F.3d 1223 (11^th Cir. 2009), which treated non-compete, non-solicitation, and “client non-compete” provisions, and a “clause concerning confidential information” in the same agreement as four separate restrictive covenants and permitted a universal presumption of irreparable harm because the defendant “breached all four [r]estrictive [c]ovenants.” However, the appellate court distinguished this case law because Vital Pharmaceuticals (Vital) did not prove that its former employee had breached her non-disclosure covenant by disclosing confidential information or by soliciting Vital’s clients about whom she held confidential information. In reversing a preliminary injunction that the federal trial court had previously issued against Vital’s former employee, the appellate court explained that without proof that Vital’s former employee breached the non-disclosure covenant, “[t]he district court abused its discretion when it applied the presumption of irreparable harm.”

The appellate court explained that without the benefit of that presumption, “Vital did not establish, as it was required to, that it was ‘likely to suffer irreparable harm in the absence of preliminary relief’ prohibiting [Vital’s former employee] … from disclosing or using its confidential information.” Vital failed to “identify any actually confidential and specific [Vital] information that is being or could be utilized by” by Vital’s former employee to unfairly compete against Vital.

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Published on: December 7, 2022

FORT LAUDERDALE BUSINESS LITIGATION: ENFORCEMENT OF NON-COMPETE INJUNCTION AGAINST NON-PARTIES FOR “AIDING AND ABETTING”

By Mavrick Law Firm

Under Florida’s non-compete statute, Florida Statutes section 542.335(1(a), a court “shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought.” The most common method of enforcing restrictive covenants is an injunction, i.e., a court order barring a particular act such as operating a competing business. Sometimes, however, an enjoined party seeks to evade the requirements of a non-compete covenant or an injunction by using a nominee, such as a spouse, family members, or a shell corporation. The legal doctrine of “aiding and abetting” liability is designed to address such a situation. Aiding and abetting liability can extend the reach of an injunction to non-parties, i.e., strangers, to a non-compete contract, where they are assisting the real party in interest who signed the restrictive covenant and is trying to avoid compliance with contractual obligations. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, 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 law, and other legal disputes in federal and state courts and in arbitration.

The Supreme Court of Florida in West Shore Restaurant Corp. v. Turk, 101 So.2d 123 (Fla. 1958), stated that the “rule that a stranger to a covenant may be enjoined from aiding and assisting the covenanter in violating his covenant is supported by an overwhelming weight of authority.” Non-parties to a restrictive covenant may be enjoined from aiding and abetting a party who is directly obligated to abide by the restrictive covenant. In other words, Florida courts will not allow a party to use or conspire with another person as an indirect method of evading a direct contractual obligation. In West Shore, the plaintiff had paid a substantial sum of money to buy a restaurant. One of the material terms of the deal was that the seller would refrain from competition. The seller, however, used a relative (his father) and another person to evade the non-compete covenant by operating a competing business. The Supreme Court explained that: “Covenants not to compete are in the best of circumstances difficult to enforce. If the covenantor wishes to avoid the agreement[,] the covenantee is required to become a policeman and a detective to catch him. When the covenantee is able to prove a breach[,] he finds it most difficult to prove, with the certainty required by law, the damages which he has suffered. For these reasons, there are few types of contracts which require greater attention by the courts in their enforcement, an in so doing the moral obligation of the covenantor, the obligation to observe the spirit as well as the letter of the agreement must be considered and enforced.” In ruling in favor of the buyer of the business, the Supreme Court added that: “‘Where one is so lost to a sense of moral obligation as to accept full consideration for his stock in trade and good-will, upon express condition that he refrain from again entering that business for a limited time, within a certain territory, and then immediately, having pocketed the fruits of the agreement, deliberately and wilfully [sic] ignores the controlling condition thereof, courts should certainly not hunt for legal excuse to uphold him in such moral delinquency.'”

Subsequent case law has held that courts can enjoin non-parties to the restrictive covenant, such as a family member of the signator or an alter ego corporation, where the nonparty is either under the signator’s control or otherwise being used to aid or abet the signator in violating the non-compete clause. For example, in Leighton v. First Universal Lending, LLC, 925 So.2d 462 (Fla. 4th DCA 2006), Florida’s Fourth District Court of Appeal explained that “[t]here is no doubt that a court can enjoin others who were not parties to the non-compete agreement.” However, before non-parties to a contract can be enjoined, they must be given notice of the allegations and have right to be heard and defend themselves. Sheoah Highlands, Inc. v. Daugherty, 837 So.2d 539 (Fla. 5th DCA 2003).

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Published on: December 3, 2022

MIAMI BUSINESS LITIGATION: FLORIDA LAW CONCERNING DISCOVERY OF TRADE SECRETS

By Mavrick Law Firm

Florida law contains an explicit privilege against disclosure of alleged trade secrets. This trade secret privilege is set forth in Florida Statutes Section 90.506, which states in pertinent part: “A person has a privilege to refuse to disclose, and to prevent other persons from disclosing, a trade secret owned by that person if the allowance of the privilege will not conceal fraud or otherwise work injustice. When the court directs disclosure, it shall take protective measures that the interests holder of the privilege, the interests of the parties, and the furtherance of justice require.” To ensure that this privilege is properly protected, courts have set forth a three-step analysis for trial courts to undertake when faced with a claim that a discovery request seeks production of protected trade secret information. Trade secrets often are asserted in lawsuits, including lawsuits involving non-compete agreements, claims of unfair competition, and employment law. 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.

The first step requires the trial court determine whether the information requested constitutes or contains trade secret information. This step will usually, but not always, require the trial court to conduct an “in camera review” of the documents to determine whether, in fact, they contain trade secret information. The legal term “in camera review” means that the Judge reviews documents outside of the view of the public, to retain confidentiality of the information the Judge is reviewing. Generally, if the parties agree that the documents contain trade secret information, then no in camera review would be needed. Where the parties disagree on whether the requested documents contain trade secret information, an in camera review or evidentiary hearing will be needed. Florida’s Third District Court of Appeal explained in Coast Fire, Inc. v. Triangle Fire, Inc., 170 So.3d 804 (3d DCA 2014), that “[s]uch a hearing may include expert testimony … Expert testimony may be particularly useful in cases where the trial court does not have requisite experience in examining the subject information.” Revello Med. Mgmt., Inc. v. Med-Data Infotech USA, Inc., 50 So.3d 678 (Fla. 2d DCA 2010), also explained that “if the circuit judge does not have the requisite experience in examining [computer source] code, he may wish to appoint a neutral computer expert to review [the party’s] program.”

If the Judge determines in this first step that the discovery request seeks information subject to the trade secret privilege, the second step of the analysis requires the Judge to determine “whether the party seeking production can show reasonable necessity for the requested information.” Ameritrust Ins. Corp. v. O’Donnell Landscapes, Inc., 899 So.2d 1205 (2d DCA 2005). This step usually requires the trial court to decide whether the need for producing the documents outweighs the interest in maintaining their confidentiality. This is a fact-intensive analysis.

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Published on: November 30, 2022

FORT LAUDERDALE BUSINESS LITIGATION: “REVERSE CONFUSION” TRADEMARK INFRINGEMENT CLAIMS

By Mavrick Law Firm

Under federal law, trademark infringement claims mainly governed by the Lanham Act. The Lanham Act imposes civil liability on “[a]ny person who … uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading misrepresentation of fact, which … in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.” One type of Lanham Act trademark infringement claim is called “reverse confusion” infringement. As a leading treatise on the law of trademark and unfair competition law has explained, the “paradigm case [of reverse confusion] is that of a knowing junior user with much greater economic power who saturates the market with advertising of a confusingly similar mark, overwhelming the marketplace power and value of the senior user’s mark.” MCarthy on Trademarks and Unfair Competition § 23:10 (5^th ed.). Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, 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 law, and other legal disputes in federal and state courts and in arbitration.

In a reverse-confusion case, the “senior user,” i.e., the party that used and had the trademark first, may suffer harm or consumers may suffer harm. For example, the defendant’s use of the trademark may diminish the value of the plaintiff’s trademark as a source indicator. As another example, consumers may come to believe the smaller, senior user of the mark is itself a trademark infringer. The United States Court of Appeals for the Sixth Circuit in Ameritech, Inc. v. Am. Info. Techs. Corp., 811 F.2d 960 (6th Cir. 1987), explained in pertinent part that: “[t]he public comes to assume the senior users products are really the junior user’s or that the former has somehow connected to the latter. The result is the senior user loses the value of the trademark—its product identity, corporate identity, control over goodwill and reputation, and ability to move into new markets.”

In a reverse confusion case, the plaintiff argues that the defendant, i.e., the junior but more powerful trademark user, “has been able to commercially overwhelm the market and saturate the public conscience with its own use of the mark, thereby weakening and diminishing the value of the senor user’s mark.” Wreal, LLC v. Amazon.com, Inc., 38 F.4th 114 (11th Cir. 2022). Courts focus on the relative strengths of the marks to gauge the ability of the junior user’s mark to overcome the senior user’s mark. Important precedent from the United States Court of Appeals for the Third Circuit in Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 269 F.3d 270 (3d Cir. 2001), explained that “in a reverse confusion situation, the senior user’s claim may be strengthened by a showing that the junior user’s mark is commercially strong. The greater relative strength of the junior mark allows the junior user to ‘overwhelm’ the marketplace, diminishing the value of the senior user’s mark.”

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Published on: November 26, 2022

MIAMI BUSINESS LITIGATION: UNJUST ENRICHMENT CLAIMS UNDER FLORIDA LAW

By Mavrick Law Firm

Miami’s Third District Court of Appeal, in Agritrade, LP v. Quercia, 253 So.3d 28 (Fla. 3d DCA 2017), explained the elements of a Florida law cause of action for unjust enrichment: “(1) plaintiff has conferred a benefit on the defendant, who has knowledge thereof; (2) defendant voluntarily accepts and retains the benefit conferred; and (3) the circumstances are such that it would be inequitable for the defendant to retain the benefit without first paying the value thereof to the plaintiff.” The basis of the remedy of unjust enrichment is to provide restitution where one person has been unjustly enriched at the expense of another. 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.

Important issues have arisen under Florida law regarding whether courts consider claims of unjust enrichment to be “legal” or “equitable” claims, and what the term “equitable” means. Florida appellate courts and federal courts interpreting Florida law have repeatedly indicated that unjust enrichment claims are “equitable.” Florida’s Third District Court of Appeal in Bowleg v. Bowe, 502 So.2d 71 (Fla 3d DCA 1987), stated that “the theory of unjust enrichment is equitable in nature.” Similarly, the United States Court of Appeals for the Eleventh Circuit in Tooltrend, Inc. v. CMT Utensili, SRL, 198 F.3d 802 (11th Cir. 1999), explained that “[a] claim for unjust enrichment is an equitable claim.” Following this line, the United States District Court for the Middle District of Florida in CEMEX Constr. Materials Fla., LLC v. Armstrong World Indus., Inc., 2018 WL 905752 (M.D. Fla. Feb. 15, 2018), stated that “[a] claim for unjust enrichment is equitable in nature.”

Confusion in case law concerning the term “equitable” arises from the distinction that courts sometimes act “in equity” and in other times act as courts “of law.” Although the term equitable can refer to this distinction between courts acting in equity versus law, “equitable” can instead mean, in context, “fairness” and have nothing to do with a court’s decision-making process. This principle was explained by Florida’s Fourth District Court of Appeal, in an en banc decision (i.e., a decision heard by the entire appellate court as opposed to a decision of typical three-judge panel), in the case Commerce Partnership 808 Ltd. Partnership v. Equity Contracting Co., Inc., 695 So.2d 383 (Fla. 4^th DCA 1997). The appellate court determined that cases from other states that “rely on the principle that there can be no remedy in equity when the [construction] line statute provides an adequate remedy at law” do not apply under Florida law because: “[t]hese cases turn on the determination that unjust enrichment is an equitable cause of action. However, in Florida, … all implied contract actions were part of the action of assumpsit, which was an action at law under common law. Although some Florida courts have described quasi contracts as being ‘equitable in nature,’ the term has been used in the sense of ‘fairness,’ to describe the quality which makes an enrichment unjust, and not as a reference to the equity side of the court.” Subsequent Florida appellate case law is in accord. For example, in American Safety Ins. Serv., Inc. v. Griggs, 959 So.2d 322 (Fla. 5th DCA 2007), Florida’s Fifth District Court of Appeal stated that compensatory damages under a claim for quasi contract cannot be awarded via the court’s equitable authority and that “an action for unjust enrichment is an action at law, not in equity.”

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Published on: November 23, 2022

FORT LAUDERDALE BUSINESS LITIGATION: NON-COMPETE COVENANT INJUNCTIONS AND IRREPARABLE INJURY

By Mavrick Law Firm

Florida’s Second District Court of Appeal in Atomic Tattoos, LLC v. Morgan, 45 So.3d 63 (2d DCA 2010), explained that a trial court should order a temporary injunction in non-compete covenant litigation only when “the moving party has demonstrated (1) irreparable harm to the moving party unless the injunction issues, (2) unavailability of an adequate legal remedy, (3) a substantial likelihood of success on the merits, and (4) that the public interest is supported by entry of the injunction.” Florida’s appellate courts construe two of these elements, i.e., “irreparable harm” and “unavailability of a legal remedy,” as being very similar. Florida courts often hold that once irreparable harm is shown, it follows that there is unavailability of a legal remedy. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, 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 law, and other legal disputes in federal and state courts and in arbitration.

For a party to be entitled to the presumption of irreparable harm, Florida’s non-compete statute provides that a party needs to prove only that the opposing party violated an enforceable restrictive covenant. Florida Statutes section 542.335(1)(j), states in pertinent part that, “[t]he violation of an enforceable restrictive covenant creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant.” That presumption, however, is rebuttable. Variable Annuity Life Ins. Co. v. Hausinger, 927 So.2d 243 (Fla. 2d DCA 2006).

Florida courts have further held that where a party is entitled to a rebuttable presumption of irreparable injury, the party also should be entitled to a rebuttable presumption that there is no adequate remedy available. In Corp. Mgmt. Advisors, Inc. v. Boghos, 756 So.2d 246 (Fla. 5th DCA 2000), Florida’s Fifth District Court of Appeal explained that: “The question of whether the injury is ‘irreparable’ turns on whether there is an adequate legal remedy available. Irreparable injury means, in essence, that injunction is the only practical mode of enforcement. A negative covenant, where one party promises he will not do certain things, is an apt example. The supreme court observed in Miller Mechanical[, Inc. v. Ruth, 300 So.2d 11 (Fla. 1974)] that certain types of contractual covenants, like covenants not to compete, by their nature lend themselves principally to enforcement by injunction because of the difficulty of arriving at a dollar figure for the actual damage done as a result of the breach.” A concurring opinion in Weinstein v. Aisenberg, 758 So.2d 704 (Fla. 4th DCA 2000), emphasized this point, explaining that, “Florida cases often discuss irreparable harm and the inadequacy of a remedy at law as if they were distinct concepts. However, Florida’s application of the irreparable injury rule is consistent with Professor Laycock’s observation that ‘[t]he irreparable injury rule has two formulations. Equity will act only to prevent irreparable injury, and equity will act only if there is no adequate legal remedy. The two formulations are equivalent; what makes an injury irreparable is that no other remedy can repair it. Attempts to distinguish the two formulations have produced no common usage.’”

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Published on: November 19, 2022

MIAMI NON-COMPETE AGREEMENTS: EX PARTE MOTION FOR TEMPORARY RESTRAINING ORDER

By Mavrick Law Firm

Federal courts in Florida allow a part to obtain a temporary restraining order, commonly referred to as a “TRO,” by proving the following elements set forth by the United States Court of Appeals for the Eleventh Circuit in Schiavo ex. rel Schindler v. Schiavo, 403 F.3d 1223 (11^th Cir. 2005): “(1) [there is] a substantial likelihood of success on the merits; (2) that irreparable injury will be suffered if the relief is not granted; (3) that the threatened injury outweighs the harm the relief would inflict on the non-movant; and (4) that the entry of the relief would serve the public interest.” Peter Mavrick is a Miami non-compete attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm also represents businesses and their owners in business litigation (including claims of breach of contract and related claims of fraud and other business torts), trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state trial courts, appeals, and in arbitration.

When a motion for a TRO is sought without ntice to the adverse party (which courts refer to as “ex parte”), the Judge may issue the TRO only if the following requirements of Federal Rule of Civil Procedure 65(1)(b)(1) are proven: “(A) specific facts in an affidavit or verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition; and (B) the movant certifies in writing any efforts made to give notice and the reasons why it should not be required.” Federal courts have explained that because of extraordinary nature of such orders, ex parte temporary restraining orders “should be restricted to serving their underlying purposes of preserving the status quo and preventing irreparable harm just so long as is necessary to hold a hearing and no longer.” Gucci Am., Inc. v. BGAADB, Case No. 18-cv-62227-UU, 2018 WL 6261548 (S.D. Fla. September 20, 2018).

For example, in WhiteSource Software, Inc. v. Coscina, 2021 WL 1259215 (S.D. Fla. April 2, 2021), WhiteSource Software, Inc. (Whitesource) sought an ex parte TRO against its former employee who remained in possession of, and intended to access, his company-issued laptop after his employment was terminated. Additionally, during his employment, he exceeded his authorization when he made copies of WhiteSource’s confidential and trade secret information for non-employment related purposes. WhiteSource alleged that as a result of these actions, it incurred losses in excess of $5,000.

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Published on: November 16, 2022

FORT LAUDERDALE BUSINESS LITIGATION: DEFENSE AGAINST TORTIOUS INTERFERENCE CLAIMS

By Mavrick Law Firm

The tort of “tortious interference with business relationship” is phrased in various ways, including “tortious interference with contractual relationship,” “intentional interference with prospective economic advantage,” and “tortious interference with advantageous business relationship.” However nominally titled, the tortious interference tort is defined by its four basic elements that a party must prove: (1) the existence of a business relationship under which the plaintiff has legal rights, (2) the defendant’s knowledge of the relationship, (3) the defendant’s intentional and unjustified interference with the relationship, and (4) damages resulting from breach of the relationship. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related business torts, including claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.

To prosecute or defend against this tort, it is helpful to understand the underlying policy tensions that have justified this tort and its affirmative defenses. In Jay v. Mobley, 783 So.2d 297 (Fla. 4^th DCA 2001), Florida’s Fourth District Court of Appeal explained that, “[t]he tort of tortious interference teeters between two competing values—the desire to protect the reasonable expectations of the parties to a business relationship on the one hand, and the need to avoid excessive restrictions on freedom of competition on the other.” Competitors sometimes file lawsuits wherein they use the tortious interference tort to inappropriately gain a competitive advantage. Accordingly, Florida law recognizes two affirmative defenses where a defendant’s actions are deemed “privileged” and therefore immune from liability.

The first privilege is the competition privilege, which generally applies where two companies compete over a contract or business. Jay v. Mobly, supra, explained that, “Florida ‘recognizes competition between competitors, and if there is an interference with a non-exclusive right[,] this is a privileged interference.’” To defend against a tortious interference claim using this “competition privilege,” the defendant must prove four distinct elements set forth in the Restatement (Second) of Torts(1979), which provides that: “(1) One who intentionally causes a third person not to enter into a prospective contractual relation with another who is his competitor … does not interfere improperly with the other’s relation if[:]

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Published on: November 12, 2022

MIAMI NON-COMPETE AGREEMENTS: PUBLIC POLICY EXCEPTION TO ENFORCEMENT BASED ON CONTINUITY OF PHYSICAN CARE

By Mavrick Law Firm

Physicians have sometimes challenged their non-compete agreements on the grounds that continuity of patient care is an “overriding public policy reason.” Physicians have argued that public policy allows the physician to care for his patients after termination of his employment, even when the wording of the restrictive covenant bars the physician from continuing to treat those patients. Over the years, Florida courts have wrestled with this issue. Florida non-compete covenant law has changed over the years based on various statutes that were re-written and amended. Florida’s statutory scheme governing restraints on competition significantly changed on July 1, 1996, the effective date of Florida’s current non-compete statute. Peter Mavrick is a Miami non-compete attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm also represents businesses and their owners in business litigation (including claims of breach of contract and related claims of fraud and other business torts), trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state trial courts, appeals, and in arbitration.

Under Florida law, a trial court that refuses to enforce a restrictive covenant based on public policy must specify in its findings the compelling reasons why enforcement is not in the public interest. In TransUnion Risk and Alt. Data Sols., Inc. v. Reilly, 181 So.2d 548 (Fla. 4th DCA 2015), Florida’s Fourth District Court of Appeal explained that “[u]nder section 542.335(1)(i)[Florida Statutes], a trial court must specifically articulate an overriding public policy reason if it refuses to enforce a non-compete covenant based on public policy grounds.”

In the recent case Joseph Spine, P.A. v. Moulton, M.D., 346 So.3d 154 (Fla. 2d DCA 2022), a physician, Dr. Moulton, sought to avoid compliance with his non-compete contract on the grounds that the non-compete violates public policy. Dr. Moulton, had been employed by a Joseph Spine, P.A. and argued he should be released from his non-compete covenant, at least with respect to his right to continue to serve patients to whom he had provided medical services before ending his employment with Joseph Spine, P.A. Dr. Moulton, argued that “continuity of care is an ‘overriding public policy reason’” and used as an example a particular patient “who was dissatisfied with his care at Joseph Spine and elected to leave that practice.” The appellate court referenced the fact that the the trial court Judge had “expressed concern at the [court] hearings … that enforcing the restrictive covenants would adversely affect patients’ continuity of care, freedom in choosing physicians, the bearing of risk between physicians after surgery, and the proximity of follow-up care for patients relative to where their procedures were performed.” The appellate court did not agree with the trial Judge, explaining that “despite the trial court’s findings that its public policy concerns were limited to ‘this case, with these facts,’ the record does not indicate any unique or special circumstances distinguishing continuity of care with the patients affected here from other patients who are generally affected by restrictive covenants enforced against physicians practicing in Florida.” Section 542.335(1)(i), Florida Statutes requires a trial court to explain why a patient’s continuity of care “substantially outweighs” Florida’s long-established precedent of protecting legitimate business interests. The appellate court’s decision in Moulton relied on its observation that “the trial court’s brief mention of protecting patients’ continuity of care does not explain why this concern substantially outweighs enforcement of the restrictions against Dr. Moulton.” Accordingly, the appellate court in Moulton reversed the trial Judge’s decision and entered a temporary injunction barring Dr. Moulton from competing against his former employer.

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