MIAMI BUSINESS LITIGATION: NON-COMPETE AGREEMENTS AND TRADE SECRETS

Florida’s non-compete statute goes hand-in-hand with Florida law prohibiting trade secret misappropriation. Under Florida’s statute governing non-compete agreements, a trade secret is a “legitimate business interest” to restrict employees and former employees from competing against their former employers. Florida Statutes § 542.335(1)(b)(1) (legitimate business includes “trade secrets”). A restrictive covenant in Florida is given an especially long period of enforcement when it is based on a trade secret. In this regard, Florida Statutes § 542.335(1)(e), states that, “[i]n determining the reasonableness in time of a postterm restrictive covenant predicated upon the protection of trade secrets, a court shall presume reasonable in time any restraint of 5 years or less and shall presume unreasonable in time any restraint of more than 10 years. All such presumptions shall be rebuttable presumptions.” 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.

A “trade secret” is defined by Florida Statutes § 688.002(4), to mean “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. Some businesses hold trade secret processes that are used by key employees of business. To establish a trade secret process, the business must prove the following: “(a) the process is a secret, (b) the extent to which the information is known outside of the owner’s business, (c) the extent to which it is known by employees and others involved in the owner’s business, (d) the extent of measures taken by the owner to guard the secrecy of the information, (e) the value of the information to the owner and to his competitors, (f) the amount of effort or money expended by the owner in developing the information, and (g) the ease or difficulty with which the information could be properly acquired or duplicated by others.” Premier Lab Supply, Inc. v. Chemplex Industries, Inc., 10 So.3d 202 (Fla. 4th DCA 2009).

Businesses seeking to enforce and protect their trade secrets are sometimes met with the defense that the business did not have a “confidentiality agreement” with its employees. Important precedent from Florida’s Third District Court of Appeal, in the seminal case Unistar v. Child, 415 So.2d 733 (Fla. 3d DCA 1982), held that “[t]he law will import into every contract of employment a prohibition against the use of a trade secret by the employee for his own benefit, to the detriment of his employer, if the secret was acquired by the employee in the course of his employment.” The lack of any express agreement on the part of the employee not to disclose a trade secret generally is not significant. Florida’s Fourth District Court of Appeal in its Premier Lab Supply decision explained that “the lack of a confidentiality agreement does not necessarily defeat Chemplex’s argument that the machine is a trade secret.” Under Florida law, a valid cause of action exists to protect an employer’s trade secrets from disclosure or use by an employee (or former employee) even when there is no express contract restraining the employee from disclosing or using such secrets. Lee v. Cercoa, Inc., 433 So.2d 1 (Fla. 4th DCA 1983). Where an employee acquires (during the course of his employment) a trade secret such as “a special technique or process developed by his employer, the employee is under a duty, even in the absence of an express contractual provision, not to disclose such skills, techniques, or processes in his new employment for his own or another’s benefit to the detriment of his previous employer.” Id.

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.