Florida Estate Planning Lawyer Blog

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.

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.

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.