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Enforcing Non-Compete Agreement with Injunctive Relief

Posted by David Adelstein on March 19, 2017
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There are numerous employers that want employees to sign a non-compete, non-disclosure, and non-solicitation agreement (collectively, the “non-compete agreement”).   For good reason, they don’t want to train employees to learn the business’ trade secrets and business practices (e.g., marking strategies, pricing, techniques, customer lists, etc.) only to then compete with the employer and solicit its clients.   The non-compete agreement will allow the employer to move for injunctive relief if a former employee violates the agreement to maintain the status quo and prevent the irreparable harm to the employer.

An example is as follows. In Allied Universal Corp. v. Given, 42 Fla. L. Weekly D631a (Fla. 3d DCA 2017), an employer that engaged in the manufacture and distribution of water treatment chemicals hired an employee. The company trained the employee regarding its practices and provided him with proprietary information such as production costs, customer lists, prospective customer lists, and marketing and pricing information. The employee’s non-compete agreement provided he would not compete with the employer for 18 months after leaving the company and within a 150-mile radius of any of the employer’s facilities. The employee left the company to work for a competitor and the employer moved for a preliminary injunction to enforce the non-compete agreement against the employee.

The trial court denied the employer’s motion for a preliminary injunction after an evidentiary hearing. The employer appealed. Because a trial court has discretion in granting or denying an injunction, its decision will not be overturned absent an abuse of discretion. In this case, the appellate court reversed the trial court finding the trial court abused its discretion in denying the granting of the preliminary injunction.

Non-compete agreements in Florida will be governed by Florida Statute s. 542.335, which is designed to construe restraints on trade and commerce in favor of providing reasonable protection to legitimate business interests. The statute includes a non-exhaustive list of legitimate business interests, such as, trade secrets, valuable confidential information, customer goodwill, substantial relationships with specific prospective or existing customers, specialized training, etc.

A party moving for a preliminary injunction must establish:

  • “the likelihood of irreparable harm and the unavailability of an adequate remedy at law;
  • a substantial likelihood of success on the merits;
  • that the threatened injury to the petitioner outweighs any possible harm to the respondent; and
  • that the granting of the temporary injunction will not disserve the public interest.”

Allied Universal Corp., supra.

Importantly, the “breach of a non-compete agreement that threatens a former employer’s goodwill and relationships with its customers, indicates that nothing short of an injunction would prevent this loss.” Allied Universal Corp., supra.

At the evidentiary hearing, the employer established legitimate business interests that it wanted to protect including the employer’s relationship with specific existing and prospective customers. The evidence showed that the employer trained the employee in its production techniques, marketing strategies, and pricing strategies.  Hence, the employer showed it would be irreparably harmed by the employee’s violation of the non-compete agreement—the employer’s business would be harmed if the employee were to use the employer’s customer information, relationships, and marketing strategy in his new employment. This meant that the burden shifted to the employee to establish the absence of an irreparable injury, which the employee was unable to do. For this reason, the appellate court reversed the trial court and remanded with directions for the trial court to grant the temporary injunction.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Innovative or Alternative Fees Can be a Win-Win!

Posted by David Adelstein on February 18, 2017
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What is the traditional model of lawyering?  Simply put, it is hourly billing.  There is nothing wrong with this model; however, there are other alternative or innovative attorney’s fee models out there that factor in performance, results, and efficiency.  These are models that incentivize performance which is always in a client’s best interest.  Stepping out of a comfort zone is tough considering we are all creatures of habit.  But, there are instances where trying something innovative or alternative is a win-win for you from a budgetary standpoint and, importantly, a results standpoint.  If you are interested in learning more about attorney’s fee models that may benefit your interests, check out the below chart and feel free to contact me.

 

Download (PDF, 273KB)

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Parol Evidence Inadmissible to Determine Intent of Unambiguous Agreement

Posted by David Adelstein on April 27, 2016
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Extrinsic or parol evidence is inadmissible to determine the meaning or intent of an unambiguous agreement. See Restoration 1 CFL v. State Farm Ins. Co., 2016 WL 1600331 (Fla. 5th DCA 2016) (error to allow deposition testimony regarding party’s interpretation of assignment when assignment agreement was unambiguous).  

“The parol-evidence rule is a substantive rule of law and reduced to its essence, provides that a written document intended by the parties to be the final embodiment of their agreement may not be contradicted, modified or varied by parol evidence.” King v. Bray, 867 So.2d 1224, 1226 (Fla. 5th DCA 2016).   While there is an exception if the document or agreement is ambiguous and needs parol evidence to assist in the document’s interpretation, if the document is clear, it will be ERROR to allow parol evidence to demonstrate the intent of the parties. Id.

Remember, if you enter into an agreement, there is a strong chance the agreement will be clear and parol evidence will NOT be allowed to demonstrate the parties’ intent or meaning of the document. This reinforces the importance of ensuring the agreement you enter is clear and reflects your intent.  Further, if a crafty party tries to introduce parol evidence to establish such intent, it is important to OBJECT to the introduction of the parol evidence to preserve this issue for appeal. King, 867 So.2d at 1226.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Admissions Against Party Opponent (Hearsay Exception) Does Not Need to be Based on Party’s Personal Knowledge

Posted by David Adelstein on April 25, 2015
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An admission against a party opponent is an important exception to the hearsay rule. I previously discussed this hearsay exception in detail because it is an exception that routinely applies in order to admit testimony / evidence at trial.

Recently, the case of Jones v. Alayon, 2015 WL 1545005 (Fla. 4th DCA 2015) discussed the applicability of this exception. This case was a wrongful death action brought by the decedent’s daughter as personal representative of the estate stemming from an automobile accident caused by an off-duty police officer that originally fled the scene of the accident. The jury awarded the plaintiff less damages than the plaintiff desired and the plaintiff appealed. One issue, amongst others, that the plaintiff argued on appeal was that the trial court abused its discretion by allowing hearsay evidence to come in that the decedent’s current wife spent decedent’s money on drugs and alcohol.

Prior to trial, the defense moved in limine to prevent evidence coming in at trial that the defendant was an off-duty police officer arguing that the prejudice of this evidence outweighs its probative value. The plaintiff argued that this evidence was relevant to damages and proffered testimony from the decedent’s current wife that she was traumatized to learn that the accident was caused by an off-duty police officer that originally fled the scene. The trial court denied the motion in limine and allowed this evidence to come in.

During trial, the defense cross-examined the decedent’s daughter (personal representative of the estate) and asked whether she ever told her sister (decedent’s other daughter that resided out of state) that decedent’s current wife spent money on drugs and alcohol. The decedent’s daughter testified no.   Then, during the defense’s case, the defense read into evidence, over a hearsay objection by the plaintiff, a portion of the deposition transcript from the sister where she testified that decedent’s daughter (personal representative of estate) told her that decedent’s current wife did not work and was spending decedent’s money on drugs and alcohol.   The plaintiff objected that this statement constituted hearsay within hearsay in that (a) the sister was relaying something said to her by decadent’s daughter (hearsay) and (b) what decedent’s daughter told her sister was obviously told to her by the decedent (hearsay) and decedent’s daughter had no personal knowledge of this fact. The defense countered that this testimony was admissible as an admission by a party opponent. The trial court agreed with the defense and overruled the plaintiff’s objection since decedent’s daughter was the personal representative of the decedent’s estate (the party plaintiff) and, thus, the statement fell within the admission by a party opponent exception to the hearsay rule.

 

Admission Against Party Opponent — Hearsay Exception

 

 

An admission against a party opponent is set forth in Florida Statute s. 90.803(18):

Admissions.—A statement that is offered against a party and is:

(a) The party’s own statement in either an individual or a representative capacity;

(b) A statement of which the party has manifested an adoption or belief in its truth….

An admission, however, does not need to be based on the party’s personal or firsthand knowledge. Jones, supra, at *3 citing Charles W. Ehrhardt, Florida Evidence, s. 803.18 (2014 ed.) (admission against party opponent does not need to be based on firsthand knowledge because when person makes relevant admissions or speaks against their interests it may be assumed they would not do so without an adequate investigation).

In this case, decedent’s daughter (personal representative of the estate) made a statement to her sister that decedent’s current wife spent decedent’s money on drugs and alcohol. Decedent’s daughter, however, apparently did not have any personal or firsthand knowledge about this fact. But, as the Fourth District expressed: “That it [statement] is based upon what someone else may have told Jones [decedent’s daughter – personal representative of estate] is unimportant, in that she would not make the statement without some investigation or indicia of reliability.” Jones, supra, at *3.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Know Your Standard of Appellate Review Regarding the Admissibility of Evidence

Posted by David Adelstein on March 21, 2015
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The standard of appellate review regarding the trial court’s admissibility of evidence is an abuse of discretion. See Vavrus v. City of Palm Beach Gardens, 927 So.2d 992 (Fla. 4th DCA 2006); Castaneda ex rel. Cardona v. Redlands Christian Migrant Ass’n, Inc., 884 So.2d 1087 (Fla. 4th DCA 2004).  Naturally, a party needs to preserve this issue by objecting to the admissibility of the evidence.  If a trial court sustains an objection and excludes the evidence, the party trying to introduce the evidence should make a proffer / offer of proof

On the other hand, the standard of review for the trial court’s interpretation of a contract, which is a question of law, is subject to the much more favorable de novo standard of appellate review. See Jenkins v. Eckard Corp., 913 So.2d 43 (Fla. 1st DCA 2005); RNK Family Limited Partnership v. Alexander-Mitchell Associates, 788 So.2d 1035 (Fla. 2d DCA 2001). This means the appellate court can examine the contract and reach a completely different legal interpretation than the trial court. See Leisure Resorts, Inc. v. City of West Palm Beach, 864 So.2d 1163 (Fla. 4th DCA 2003). Best explained by the Fourth District Court of Appeal in Gilman Yacht Sales, Inc. v. FMB Investments, Inc.766 So.2d 294, 296 (Fla. 4th DCA 2000) (internal citations omitted):

The interpretation of a written contract is a question of law to be decided by the court. An appellate court is not bound to give the trial judge’s interpretation or construction of a contract any weighted presumption of correctness. To the contrary, a decision construing a contract is reviewable on appeal under a de novo standard of review, and therefore we are required to consider for ourselves anew the meaning of the disputed contractual language.

It is important for parties to know the standard(s) of appellate review they may confront when appealing a trial court’s ruling as the standard of review will dictate the amount of deference the appellate court is required to give the trial court’s ruling. A de novo standard of review is much more favorable than an abuse of discretion standard of review.  The appellate standard of review is an essential component of appellate practice and will be identified in an appellate brief.   And, besides the standard of review, a party defending an appeal (appellee) may argue that to to the extent the trial court erred, such error was nothing more than a harmless error that did not contribute to the verdict.  

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Is Greed Really Good?

Posted by David Adelstein on December 13, 2014
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We all remember  the famous “Greed is Good” speech from the movie Wall Street.

How do you not love this movie and this speech?  But, is greed really good?  Does, greed really clarify the essence of the evolutionary spirit?

When it comes to a dispute, sometimes–and most of the time–it is perhaps better to analyze the dispute from a big picture perspective in order to come a reasonable resolution.   Yes, this reasonable resolution may not result in the resolution you ideally wanted, but it may potentially be the right resolution where greed and principle remain on the outside.

It is not always the best option to take a sophisticated or complicated dispute to trial.  Sometimes, the parties are left with no choice–perhaps because the parties are allowing greed or principle to interfere with their business decision or what they perceive to be a reasonable resolution.  This happens.  That’s alright.  There are times the parties are too far apart to resolve a dispute without trial.  And, in my opinion, every dispute should be prepared with trial in mind because it is this preparation and understanding of the facts and required proof at trial that may help parties reach the reasonable resolution.

Trial is fun for the lawyers.  But, trial takes the dispute out of the parties’ hands and puts the dispute in the hands of a trier of fact (judge or jury) that may not appreciate the facts or the intricacies of a complicated dispute, or a party’s position in a dispute.  And, there is a winner and there is a loser (and, there are times all the parties lose)…and, then there is the appeal that further prolongs the outcome.

So, this brings us back to the question: Is greed good?

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Prove My Case

Posted by David Adelstein on December 06, 2014
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There is no better way to begin, then by relying on scenes in movies to support a point!

Well, what is the point?

It’s not about having a case, it is about PROVING your case…persuasively!

 

 

Well, it’s not what you know, it’s what you can prove in court!

And, truthfully!

 

 

You want answers?  I want the truth.  YOU CAN’T HANDLE THE TRUTH!

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

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Prove YOUR Case!

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