Florida Estate Planning Lawyer Blog

Chames v. Demavo, 32 Fla. L. Weekly S820 CR. Sup. Ct. December 20, 2007

An attorney owed fees from his clients under a retainer agreement attempted to enforce a lien against the homestead of the clients. The retainer agreement had expressly waived the parties’ constitutional homestead protection against claims of creditors.

Asking the Court to recede from prior Florida precedent in Carter and Sherbill, the appellant argued the 1995 constitutional amendment removing "head of family" changed the purpose of the creditor protection, that the trend in other states was to permit waivers, and permitting the waiver was consistent with other precedent allowing waivers.

The Court rejected the arguments of the waiver and concluded "the waiver of the homestead exemption will become an everyday part of contract language for everything from hiring of counsel to purchasing cellular telephone services ... [which will inevitably result in whittling away this century old constitutional exemption until it becomes little more than a distant memory."

A waiver of your homestead rights in a contract is still not valid in Florida (except with regards to pre and post nuptial agreements).

After quitting or being terminated, your employer will tell you that you are bound by your non-compete agreement. The reality is that even if the agreement is invalid, most employees don’t have the will or the resources to fight a non-compete or non-solicitation agreement. Many employees think that, just because an employer forced them to sign the agreement or be fired, that they are not bound by a non-compete agreement. That’s just not true.

Continued employment is valid consideration for a non-compete agreement in Florida. Florida statutes presume that non-compete agreements are valid. That doesn’t mean you can’t get out of yours if you’re willing to fight.

What usually happens is the employer sends a letter to the employee and the new employer, threatens to sue both, and the employee gets fired from their new job, even where they told the new employer about the non-compete. That’s because, unless you have a contract with the new employer spelling out that you can only be fired for cause, and that the non-compete is known to the employer and is not cause, Florida is an at-will state. That means any employer can fire any employee for any reason or no reason at all.

Smart employees consult a Employment Lawyer before signing a non-compete to be advised of their rights. Even if you signed without getting advice, you still may have some legal arguments to defeat your Florida non-compete.

1. Employer breaches the contract: If your employer put the non-compete provision in an employment contract spelling out compensation, insurance and other conditions of employment, it is important to have an attorney go through the contract line-by-line. If the employer breached the agreement by failing to pay all compensation due, failing to fulfill the insurance requirements, or failing to meet some other obligation, the employee can be relieved of all obligations under the contract.

2. No legitimate interest to enforce: Many employers attempt to overreach their legitimate business interests, and this is one of the most common mistakes. For instance, an employer has no legitimate interest in enforcing a non-compete against low-level employees such as receptionists and clerical employees. An employer who manufactures computer software for accountants has no legitimate interest in preventing an employee from working on software for doctors. An employer who is phasing out of an area has no legitimate interest in preventing an employee from working in that area. An employer who abandons a particular customer, area of business, or product has no legitimate interest in the area it abandoned. The statute allowing non-compete agreements assumes that the following are legitimate business interests:

a. Trade secrets;
b. Valuable confidential business or professional information;
c. Substantial relationships with specific prospective or existing customers, patients, or clients;
d. Goodwill associated with an ongoing business or professional practice, by way of a trademark, geographic location or marketing/trade area;
e. Extraordinary or specialized training

3. Agreement is for too long a time period: For employees, a period of less than 6 months is presumed valid, and over 2 years is presumed invalid. In between, the employer will have to prove that the time period is reasonable. Most courts in Florida will assume that agreements up to 2 years are reasonable and narrow agreements for longer periods of times to be compliant with what is reasonable. But anything over 2 years is going to be a hurdle for the employer to overcome.

4. The confidential information is something readily available to the public: Many companies get their sales leads from public sources. Phone books, professional directories, the internet, notification services, are all sources that are available to anyone in the industry. So an employer who claims they are protecting their valuable secret client sources is going to have to show that the information was not available to everyone else in the industry. Existing customer lists or unique sources are protected, but chamber of commerce directories are not.

5. Public health or safety would not be served: This primarily applies to doctors, nurses, and people in specialized scientific and health areas. If there is a shortage of people in a particular specialty, or in a particular geographic area, then the employer cannot enforce a non-compete even if all the other requirements are met. If you are one of 10 brain surgeons in the country who can perform a particular procedure, your employer probably can’t prevent you from saving people’s lives.

I tell people to assume their non-compete agreements are enforceable, and not to sign them unless they can live with the restrictions. Even if they are not enforceable, many people do not have the financial resources to fight the enforcement. Florida Statutes allow individuals to recoup their legal fees and costs, but there is no guarantee that the judge will rule in their favor completely. An employee with the time, will, and resources to fight can frequently limit or eliminate their non-compete provisions.

An employer who tries to enforce a non-compete and fails can end up paying the attorney’s fees and costs of the prevailing employee, and will sometimes be paying money damages to the employee for tortious interference with an employment relationship if they cost the employee a job.

If you’re leaving a job and you have a non-compete, the best thing to do is get advice from a Florida Employment Lawyer before you leave. A written agreement with the new employer to defend you and to pay you even if you can’t perform particular services if a court issues an injunction will protect you. If you get sued to enforce a non-compete, you MUST contact an employment attorney immediately to defend yourself or you will lose your new job, you will have a money judgment against you, and you will have no ability to raise any defenses to the non-compete agreement.

If you are be affected by this type of behavior or want to put policies in place in your business to help prevent these actions please contact a Jacksonville Employment Lawyer.

Over the last weekend I tried to keep up with various websites. While Visiting Universal in Orlando with my family I say a posting by Michale with The Ohio Trust & Estate Blog and thought you might enjoy it also.

While credit is tight and many Jacksonville consumers are facing foreclosure on their homes, and attempts to collect old credit card debts, companies have been trying to use waiver of you homestead to collect debts. For over 100 years Jacksonville residents and those living in Florida have had been able to protect their home from claims of creditors. Arguably the home is one of the most valuable assets a Florida resident has. Recently there has been concern over the ability of a homeowner to waive their right to protection. The Florida courts have allowed people to waive many of their constitutionally protected rights, but up to now a waiver of ones Florida homestead protection was invalid except in the case of a valid pre or post nuptial agreement. This case represented the most recent attempt to allow waiver of ones constitutionally protected homestead protection.

In a case involving the Florida Constitution's exemption which protects homeowners' residences from forced sale, the Supreme Court of Florida reaffirms that, while the exemption can be waived in a mortgage, it cannot be waived in an unsecured agreement. The court rejects claims that it should recede from its precedent based on a constitutional amendment, a purported national trend approving such waivers, and recent holdings that other constitutional rights can be waived.
To review the case and the extensive analysis the Florida Supreme Court took read Chames v. Demayo

If you are having problems with collection agents trying to collect debts, credit card debts, or other types of debts, contact a Florida Business Lawyer, or Jacksonville Consumer Debt Lawyer.

As a Jacksonville Florida non-compete Lawyer, I often am asked about some of the provisions that are contained in a Florida employment agreement. I found an article on the Texas Non-Compete Law Blog, entitled Texas Executive Employment Agreements: Checklist for Employees and thought that the information would be relevant to my Florida Clients. I have based this information on what was contained in that article, but modified removed some information and added some that is specific to Jacksonville and throughout Florida .

1. Term of Employment. Employment agreements are either for a fixed term or at-will. An at-will employment agreement can be terminated by either party at any time for any reason. Some employment agreements that are purportedly for a fixed term (e.g., a one-year term) also contain provisions pursuant to which the employer may terminate the employee “for any reason” on shorter notice (e.g., “thirty days’ notice”)—such an agreement is in reality a 30-day employment contract.

2. Position, job duties, location. Employment agreements routinely contain provisions outlining what the employee’s title will be, what their duties will be, who the supervisor will be, and where the work will be performed.

3. Compensation. Employment agreements often reference compensation or salary and sometimes discretionary compensation (e.g. bonuses and stock options).

4. Termination for Cause. Employment agreements often provide that an employee may be terminated for “cause,” and “cause” is defined to include various acts or omissions by the employee. Some acts—like commission of a felony and embezzlement of company funds are fairly easy to understand. However, defining “cause” to include the employee’s failure to perform his/her job duties can be difficult because this can be subjective. Employees want what a clear non subjective definition of cause.

Continue reading "Florida Employment Agreements: Terms and Conditions" »

As a Jacksonville Florida Contracts & Business Lawyer, I often get asked about Florida Business contracts that are broken. Often when we sit down and look at the Florida contract it is evident that there never was a contract as defined in Florida.

When there is not a contract there are other methods of recovery. One of these is Unjust Enrichment and the Florida Supreme Court has defined the elements of the unjust enrichment claim as (i) a benefit conferred upon a defendant by the plaintiff, (ii) the defendant’s appreciation of the benefit, and (iii) the defendant’s acceptance and retention of the benefit under circumstances that make it inequitable for him to retain it without paying the value thereof.

The courts in Jacksonville and the 1st DCA use the following elements 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 paying the value thereof to the plaintiff.

The Statute of Limitations for unjust enrichment in Florida is (4) four years per Fla. Stat. §95.11(3)(k);

There are several recognized defenses to unjust enrichment. These include:

1) Express Contract: An action for unjust enrichment fails upon a showing that an express contract exists
2) Payment Made: Unjust enrichment cannot exist where payment has been made for the benefit conferred
3) Received in Good Faith: The law seems to be settled that money paid under a mistake of facts cannot be reclaimed where the plaintiff has derived a substantial benefit from the payment, nor where the defendant received it in good faith in satisfaction of an equitable claim, nor where it was due in honor and conscience.

To have a valid contract there must be an offer, acceptance, and consideration.
If you feel that you are dealing with a breach of contract and have suffered damages as a result, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involve Contract disputes. These disputes can be between employees and employers, companies and their suppliers, or individuals and contractors.

Definition: failing to perform any term of a contract, written or oral, without a legitimate legal excuse. This may include not completing a job, not paying in full or on time, failure to deliver all the goods, substituting inferior or significantly different goods, not providing a bond when required, being late without excuse, or any act which shows the party will not complete the work ("anticipatory breach"). Breach of contract is one of the most common causes of law suits for damages and/or court-ordered "specific performance" of the contract.

Elements Cause of Action - 1st DCA
It is elementary that in order to recover on a claim for breach of contract the burden is upon the claimant to prove by a preponderance of the evidence the existence of a contract, a breach thereof and damages flowing from the breach.

To have a valid contract there must be an offer, acceptance, and consideration.
If you feel that you are dealing with a breach of contract and have suffered damages as a result, you should discuss the facts and circumstances with a Florida Business Lawyer.

As a Jacksonville Business Lawyer, I often run up against cases which involved Tortious Interference with a Contractual Right along with Claims for Beach of a Florida non-compete agreement. The elements of this cause of action are

1) The existence of contract to which plaintiff is a party;
2) Defendant's knowledge of the contract;
3) Defendant's intentional procurement of the contract's breach;
4) The absence of justification or privilege; and
5) Plaintiff suffered damages resulting from the breach.

Tortious interference with a contract is virtually identical to the elements of a claim for tortious interference with a business relationship.

There are many defenses to Tortious Interference with a Contractual Right. They include

1) Affirmative defenses
2) Statute of limitations - four years
3) Defendant is not liable where she did not "intentionally" interfere with plaintiff's business relationship.
4) Acts occurring during a judicial proceeding are absolutely privileged and cannot give rise to tortious interference claims.
5) When the contract provision expressly reserves the right of interference.
6) Agent that gives, on request by his or her principal "honest advise" in his or her principal's best interest.
7) Plaintiff cant bring action against party of the contract at issue.
8 )Privileged or justified conduct does not give rise to Tortious interference claim.
9) Defendant acting to protect her own economic or financial interest is not liavle for tortious interference.
10) Plaintiff cannot premise claim on alleged interference with a contract that is terminable at will provided that interference is lawful competition.
11) Defendant's settlement of a lawsuit that adversely affects plaintiff's business interest does not give rise to Tortious interference claim.

If you feel that an employee has breached their Florida Non-Compete Agreement or has interfered with a contract between you and a client, you should discuss the facts and circumstances with a Florida Business Lawyer.