Florida Estate Planning Lawyer Blog

Jay Shepherd who writes the Gruntled Employees Blog has a good article on the "Eight Ways to Lose a Noncompete Case." Here is his list of the 8 most common ways companies to lose a noncompete case:

1. Putting too much faith in the belief that the court will enforce the language of the noncompete agreement as written.
2. Trying to enforce a noncompete against employees who really don't possess any confidential information or customer relationships.
3. Drafting the noncompete too broadly.
4. Focusing only on geography, duration, and scope of the noncompete rather than on the existence of protectable interests.
5. Waiting too long to file.
6. Asking for an injunction before you've developed enough evidence.
7. Filing in the wrong jurisdiction.
8. Focusing on the law instead of on the story of the case.

Jay's bottom line is that "If your client's wearing the white hat, and your agreement is narrowly drafted, and your secrets or customer relationships are in imminent peril, then you've got a fighting chance of winning. Otherwise, wave goodbye to the former employee and get back to work."

While many of these are true in Florida, when there is a protectable business interest, most Florida Courts are willing to rewrite the agreement and make some of it enforceable. If you would like your non-compete agreement reviewed, Contact a Florida Non-Compete 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 Jacksonville 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. Most at-will employment agreement can be terminated by either party at any time for any reason. Some Jacksonville employment agreements are for a fixed term (e.g., a six-months or 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. Florida 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.

5. Classification. Employment agreements often reference an employees status as exempt or non-exempt. In some cases employees are classified as independent contractors. Whether or not an employee is an independent contractor, an employee, exempt, or non-exempt is often a factual analysis of the interactions amongst employees and their employers.

6. Nondisclosure Agreements. Employment agreements can contain prohibitions on the disclosure of the employer’s confidential or proprietary information to a third party. An employee needs to know what information the employer considers to be confidential or proprietary. Employers need to notify employees what information they consider confidential or proprietary.

7. Non-compete Agreements: can contain provisions limiting an employee’s right to compete with the employer, both during and after employment. The provision should specify activities in which the employee may not engage. In Florida the geographic scope of the restrictions must be reasonable. Terms of non-compete agreements are limited in Florida, most agreements that are in excess of 2 years are considered unreasonable and the court may shorten the term.

8. Non-solicitation Agreements. Along with non-compete provisions, some employment agreements contain prohibitions on soliciting the employer’s customers, its employees, and/or its vendors. In Florida, these provisions are enforceable.

9. Change in Control. What happens if the employer is purchased by another company? Should that affect the employee’s obligations? Should the employee be able to escape his non-compete and non-solicitation obligations? On a related note, should the employer be able to assign the agreement to another company (so that the “new” company can enforce the employee’s non-compete and non-solicitation obligations)? Employment agreements don’t always address these issues, but employees are wise to think about them.

10. Arbitration. Employment agreements often state that legal disputes between employers and employees must be submitted to binding arbitration (versus being litigated in court). Provisions like this can be one-sided (i.e., sometimes, only the employee is required to arbitrate its disputes, whereas the employer can go to court). Employers need to be mindful of the effects of agreeing to arbitrate disputes as opposed to litigate them.

11. Choice of Law and Forum Selection. Employment agreements usually specify the state whose law will govern the agreement and the place where suit must be filed in the event of a legal dispute. The latter can be especially problematic for an employee, because it may require her to bring any claims she may have in a foreign state, which can be very expensive.

I was recently asked about violations of a Florida non-compete agreement and the effect of a personal bankruptcy filing. I found a case which seems to address this issue on point. The case law is that as long as the debtor does not prove that the contract damages are tortuous and that he debtor caused willful and malicious injury the claims are discharged under the bankruptcy code as any other claim is.

This issue was raised by a company who failed to present evidence in a ex-employee's bankruptcy case that was sufficient to show both that the conduct was tortious and that the acts were both willful and caused a malicious injury to the company.

It would seem to reason that an ex-employer who failed to raise these issues during the bankruptcy would also denied a claim against the ex-employee.

If you are a company who has a cause of action against an ex-employee or an ex-employee who has filed bankruptcy and involved in a suit over a non-compete or Florida non-solicitation issue you should contact a Florida employment Lawyer who deals with Florida Non-Compete law.

Often after leaving your job your previous employer will try to hold you to the terms of a non-compete or non-solicitation agreement. An important part of determining the enforceability of the agreement is whether you can afford to defend a suit by the employer.
Although many non-compete agreements are not enforceable as written, courts will see if there is a way to reduce the scope by limiting the time, range of activities restricted, or the geographic restrictions if there is a legitimate business interest that the business is trying to protect.

There are many defenses to non-compete agreements and if you are willing to fight there is a chance you can settle or will a case. The best defense is to review and structure your agreement prior to executing it. It is important to have your agreement reviewed by a Florida Non-compete Attorney or a Florida Non-solicition Lawyer to determine what your chances of prevailing are.

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" »

Florida employment agreements and Florida non-compete agreements frequently contain non-solicitation clauses. These agreements or clauses prohibit an employee from soliciting the employer's clients and/or employees while they are employees and for a period of time after there employment.

The Texas Non-Compete Law Blog references a Massachusetts case that illustrates the difficulty in making the determination of whether an act or communication constitutes solicitation. They have very in depth article on this case. Here is a short summary of the case they review. The following provision was at issue:

Non solicitation Covenant. For a twelve (12) year period commencing on the date hereof, Seller shall not, directly or indirectly, (a) employ or contact any person who is employed or engaged by the Company or in any manner seek to induce any such person to leave his or her employment or engagement with the Company.

The issue in the case came down to whether social interaction with potential clients was a violation of the agreement.

The court found that social interaction could be a violation when there was an attempt to solicit clients for business, but that social interaction in itself was not restricted. The company could have prohibited all interaction but their agreement did not.

If you have a question about the validity or enforceability of a non-solicitation agreement under Florida Law, contact a Jacksonville Non-Solicitation Lawyer for a review of your facts and circumstances.

As a Jacksonville Business Lawyer, I often run up against cases which involve Florida Non-Solicitation Agreements.

Definition: Solicitation is the crime of encouraging or inducing another to commit a crime or join in the commission of a crime. Solicitation may refer to a prostitute's (or her pimp's) offer of sexual acts for pay.

Florida legal theories and defenses
one who is employed as an agent, independent contractor, or employee may agree ... with her or his employer, to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a reasonably limited time and area ... so long as such employer continues to carry on a like business therein. Said agreements may, in the discretion of a court of competent jurisdiction, be enforced by injunction.
Defenses

If you feel that you are dealing with a case which involves solicitation or a non-solicitation agreement, 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 a Breach of a Fiduciary Duty. These disputes can be between employees and employers, companies and their suppliers, Personal representatives and beneficiaries, guardians and wards, Trustees and beneficiaries, or officers, directors, managers and the company they work for.

Definition: a fiduciary relationship is where one person places complete confidence in another in regard to a particular transaction or one's general affairs or business. The relationship is not necessarily formally or legally established as in a declaration of trust, but can be one of moral or personal responsibility, due to the superior knowledge and training of the fiduciary as compared to the one whose affairs the fiduciary is handling.

Elements Cause of Action - Florida Supreme Court
The elements of a claim for breach of fiduciary duty are: the existence of a fiduciary duty, and the breach of that duty such that it is the proximate cause of the plaintiff’s damages

If you feel that you are dealing with a breach of fiduciary duty 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.