[LTPC-discussions] Interesting article
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Tue, 5 Aug 2003 16:03:16 EDT
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Will be asking if we should take an active approach and have non compete=20
rules invalid.
Richard Moore
=A0
=A0
Attorney in Orlando, FL
Law Offices of=20
N. James Turner, Esq., P.A.
Eola Park Centre
200 East Robinson St.
Suite 1110
Orlando, Florida 32801
407-422-6464=20
=20
Employment Law : Non-compete Agreements
=20
=20
REPRESENTING THE EMPLOYEE
IN RESTRICTIVE COVENANT DISPUTES
Restrictive covenant (covenants not-to-compete) litigation involves very hig=
h=20
stakes, particularly for the employee who faces a temporary, or perhaps=20
permanent, loss of his or her livelihood. Not only is it often expensive and=
=20
time-consuming, but also emotionally and financially draining. Thus, at the=20
beginning of the representation, the attorney representing an employee who m=
ay be=20
bound by a covenant not-to-compete should carefully review and consider the=20=
merits=20
of the litigation, as well as the short-term and long-term business=20
ramifications for the client.
This paper will discuss some of the issues and decisions to be confronted an=
d=20
the determinations to be made in such litigation.
I. STATUTORY FRAMEWORK.
Section 542.33(2)(a) of the Florida Statutes was amended in 1990 and enacted=
=20
to clarify the courts' discretion to enforce non?compete agreements. / This=20
amendment expresses the legislature's intent that covenants not-to-compete,=20
although validated by the statute, are not enforceable by injunction (1) if=20
enforcement would be contrary to the public health, safety, or welfare; (2)=20=
if the=20
covenant is unreasonable; or (3) if the proponent is unable to show irrepara=
ble=20
harm if the covenant were not enforced according to its terms.
>=20
> Section 542.33 of the Florida Statutes states:
> (1) Notwithstanding other provisions of this chapter to the contrary, each=
=20
> contract by which any person is restrained from exercising a lawful=20
> profession, trade, or business of any kind, as provided by subsections (2)=
and (3)=20
> hereof, is to that extent valid, and all other contracts in restraint of t=
rade=20
> are void.
>=20
> (2)(a) One who sells the goodwill of a business, or any shareholder of a=20
> corporation selling or otherwise disposing of all of his shares in said=20
> corporation, may agree with the buyer, and one who is employed as an agent=
,=20
> independent contractor, or employee may agree with his employer, to refrai=
n from=20
> carrying on or engaging in a similar business and from soliciting old cust=
omers of=20
> such employer within a reasonably limited time and area, so long as the=20
> buyer or any person deriving title to the goodwill from him, and so long a=
s such=20
> employer, continues to carry on a like business therein. Said agreements m=
ay,=20
> in the discretion of a court of competent jurisdiction, be enforced by=20
> injunction. However, the court shall not enter an injunction contrary to t=
he=20
> public health, safety, or welfare or in any case where the injunction enfo=
rces an=20
> unreasonable covenant not to compete or where there is no showing of=20
> irreparable injury. However, use of specific trade secrets, customer lists=
, or direct=20
> solicitation of existing customers shall be presumed to be an irreparable=20
> injury and may be specifically enjoined. In the event the seller of the=20
> goodwill of a business, or a shareholder selling or otherwise disposing of=
all his=20
> shares in a corporation breaches an agreement to refrain from carrying on=20=
or=20
> engaging in a similar business, irreparable injury shall be presumed.=20
>=20
>=20
The 1990 amendment restricts the availability of injunctive relief in=20
non?compete agreement cases by requiring parties to plead and prove irrepara=
ble=20
injury. / However, the amendment did not disturb "the presumption of irrepar=
able=20
injury in connection with the use of trade secrets, customer lists, or direc=
t=20
solicitation of existing customers."=20
The procedure for enforcing a covenant not-to-compete usually begins with an=
=20
application to the Court for injunctive relief, which, in Florida, is strict=
ly=20
governed by rule. In particular, Rule 1.610 of the Florida Rules of Civil=20
Procedure provides as follows:
>=20
> (a) Temporary Injunction.
> (1) A temporary injunction may be granted without written or oral notice t=
o=20
> the adverse party only if:
> >>=20
>> (A) it appears from the specific facts shown by affidavit or verified=20
>> pleading that immediate and irreparable injury, loss, or damage will resu=
lt to=20
>> the movant before the adverse party can be heard in opposition; and
>> (B) the movant's attorney certifies in writing any efforts that have been=
=20
>> made to give notice; and
>> (C) the reasons why notice should not be required.
>=20
> (2) No evidence other than the affidavit or verified pleading shall be use=
d=20
> to support the application for a temporary injunction unless the adverse=20
> party appears at the hearing or has received reasonable notice of the hear=
ing.=20
> Every temporary injunction granted without notice shall be endorsed with t=
he=20
> date and hour of entry and shall be filed forthwith in the clerk's office=20=
and=20
> shall define the injury, state findings by the court why the injury may be=
=20
> irreparable, and give the reasons why the order was granted without notice=
if=20
> notice was not given. The temporary injunction shall remain in effect unti=
l the=20
> further order of the court.
>=20
> (b) Bond. No temporary injunction shall be entered unless a bond is given=20=
by=20
> the movant in an amount the court deems proper, conditioned for the paymen=
t=20
> of costs and damages sustained by the adverse party if the adverse party i=
s=20
> wrongfully enjoined. When any injunction is issued on the pleading of a=20
> municipality or the state or any officer, agency, or political subdivision=
thereof,=20
> the court may require or dispense with a bond, with or without surety, and=
=20
> conditioned in the same manner, having due regard for the public interest.=
No=20
> bond shall be required for issuance of a temporary injunction issued solel=
y=20
> to prevent physical injury or abuse of a natural person.
>=20
> (c) Form and Scope. Every injunction shall specify the reasons for entry,=20
> shall describe in reasonable detail the act or acts restrained without=20
> reference to a pleading or another document, and shall be binding on the p=
arties to=20
> the action, their officers, agents, servants, employees, and attorneys and=
on=20
> those persons in active concert or participation with them who receive act=
ual=20
> notice of the injunction.
>=20
> (d) Motion to Dissolve. A party against whom a temporary injunction has be=
en=20
> granted may move to dissolve or modify it at any time. If a party moves to=
=20
> dissolve or modify, the motion shall be heard within 5 days after the mova=
nt=20
> applies for a hearing on the motion
Probably the most important strategy decision to employ when faced with an=20
application for injunctive relief is to take the offensive immediately. The=20
employee must attempt to turn the tables on the employer in order to gain a=20
tactical advantage. Therefore, an employee who may be faced with the threat=20=
of=20
imminent litigation through the filing of an injunction for alleged breach o=
f a=20
restrictive covenant may wish to consider a preemptive strike: filing a moti=
on to=20
dissolve or commencing a declaratory judgment action, which would seek a=20
determination of the enforceability of the restrictive covenant and a declar=
ation=20
of its invalidity, and also may raise other related issues and claims. If a=20
non-final appeal is necessary, it should be considered that in cases where t=
here=20
are no disputed factual matters at issue, the appellate court will review th=
e=20
injunction de novo. / And, although the interpretation of a covenant=20
not-to-compete is a matter of law to be resolved by a trial court, an appell=
ate court=20
is nevertheless empowered to undertake an independent assessment of the=20
covenant's meaning. / Thus, an appellate court is not restricted in its abil=
ity to=20
reassess the meaning and effect of the parties' non-competition agreement an=
d=20
to reach a conclusion which differs from that of the trial court. /
As the purpose of an injunction is to prevent irreparable harm, one such=20
tactic is to show that the employer will not be irreparably harmed absent th=
e=20
injunction. However, where a plaintiff sufficiently demonstrates that a form=
er=20
employee is contacting its customers, the presumption of irreparable injury=20
attaches. /
In addition, one of the requirements for the issuance of an injunction is a=20
showing that success on the merits is likely. In Cordis Corp. v. Prooslin /,=
=20
the court held that there was no abuse of discretion in denying a temporary=20
injunction where the record showed doubt that the employer had the ability t=
o=20
succeed at trial. Accordingly, any available factual and legal arguments sho=
uld be=20
made which show that the claims have little, if any, chance of success.=20
Furthermore, a showing that the former employer does not have a legitimate i=
nterest=20
to protect and/or that the restrictive covenant does not reasonably protect=20
that interest will go a long way toward casting doubt on the employer's righ=
t=20
to an injunction.
It should be kept in mind that the ultimate goal is to declare the=20
restrictive covenant invalid, and, if appropriate, to recover on the employe=
e's=20
counterclaims. Therefore, that individual must have "clean hands" and be pre=
pared to=20
show the Court that no improper actions were committed in connection with hi=
s=20
or her former employment. Any arguably wrongful actions by the employee duri=
ng=20
the course of the litigation must be avoided at all costs.
II. DEFENSES
After litigation has commenced, the following defenses should be considered=20
and pursued:
>=20
> A. Whether the restrictive covenant is unenforceable.
> >>=20
>> 1. No legitimate protectable interests exist on the part of the employer=20
>> because:
>> >>>=20
>>> (a) no trade secrets exist;
>>> (b) no customer lists exist and/or the "stolen" customers were the=20
>>> employee's pre-existing customers;
>>> (c) the employee had pre-existing knowledge and/or contacts which are=20
>>> legitimately able to be used for the subsequent employer;
>>> (d) if a "product" is involved, it is commonly known and sold and/or=20
>>> easily duplicated by the competition;
>>> (e) the true motivation of the employer is the improper stifling of=20
>>> legitimate competition.
>>=20
>> 2. Whether the restrictive covenant is unreasonable in time and/or scope,=
=20
>> possibly arguing:
>> >>>=20
>>> (a) if the covenant is "reasonable as to its duration and geographical=20
>>> limitation...." /; or a two?year restriction is reasonable on its face.=20=
/=20
>>> Furthermore, the employee must show that the term was unreasonable as it=
=20
>>> applied to him. / An injunction will not issue if the employee can demon=
strates=20
>>> that the employer did not prove irreparable injury stemming from the=20
>>> employee's employment with a competitor.=20
>>> (b) the covenant is not limited to present customers of the employer;
>>> (c) the employee has "business" everywhere, so that enforcement of the=20
>>> covenant effectively prohibits an employee from working in the field and=
=20
>>> destroys his livelihood;
>>> (d) the circumstances of the employee's termination (i.e., not for cause=
,=20
>>> as part of a layoff, for a pretextual, discriminatory or other illegal=20
>>> reason) are such that it is inequitable to enforce the covenant under th=
e=20
>>> circumstances.
>>> (e) All agreements that restrict one's right to work and earn a living a=
re=20
>>> to be strictly construed as being in derogation of common law. In Marsha=
ll=20
>>> v. Gore, 506 So.2d 91, 92 (Fla. 2d DCA 1987) the court stated:
>>> >>>>=20
>>>> Perhaps the most fundamental to our determination is that '[t]he right=20=
to=20
>>>> work, earn a living and acquire and possess property from the fruits of=
=20
>>>> one's labor is an inalienable right.' (citing Lee v Delmar, 66 So.2d 25=
2,=20
>>>> 255 (Fla. 1953)).
>>>=20
>>> Furthermore, Article 1, Section 11, of the Florida Constitution protects=
=20
>>> the right and opportunity to move freely within the labor force for one'=
s=20
>>> own advancement and economic productivity. All agreements in derogation=20=
of=20
>>> the common law and these fundamental rights must be strictly construed a=
nd=20
>>> zealously guarded. See generally Hapney v. Central Garage, Inc., 579 So.=
2d=20
>>> 127 (Fla. 2d DCA 1991).
>>=20
>=20
> B. Whether the employer breached the contract between it and the former=20
> employee prior to the employee's alleged breach, thereby obviating any obl=
igation=20
> on the part of the employee to comply with same. Florida law holds that an=
=20
> employer's breach of an employment contract is a relevant factor in=20
> determining whether an employer is entitled to a temporary injunction enfo=
rcing a=20
> covenant not to compete. In the case Cordis Corporation v. Prooslin, 482 S=
o.2d 486=20
> (Fla. 3d DCA 1986), the court affirmed the trial court's decision to deny=20=
a=20
> temporary injunction where there was evidence that the employer's breach o=
f=20
> the underlying contract cast doubt on whether or not the employer was clea=
rly=20
> entitled to success on the merits. The Prooslin court recognized that if a=
n=20
> employer is in breach or default under an agreement or when he gives good=20
> cause for a former employee's non-performance he has no standing in equity=
to=20
> seek an injunction. The Prooslin court noted that the trial court's discre=
tion=20
> in granting a temporary injunction should be guided by established rules a=
nd=20
> principles of equity jurisprudence. In the case of Troup v. Heacock, 367 S=
o.2d=20
> 691 (Fla. 1st DCA 1979), the appellate court reversed the trial court's=20
> decision that granted a motion for temporary injunction. The appellate cou=
rt=20
> noted that the employer had materially breached the employment contract an=
d=20
> therefore the covenant not to compete was unenforceable by the employer. T=
he Troup=20
> court stated that if the injunction were allowed to stand not only would i=
t=20
> be contrary to equity but it would result in inverse peonage. Numerous oth=
er=20
> Florida cases have recognized the a prior material breach by an employer w=
ill=20
> discharge an employee from abiding by a covenant not to compete. Generally=
S
> eaboard Oil Co. v Donovan, 128 So. 821 (Fla. 1930); Sarasota Beverage Comp=
any=20
> v. Johnson, 551 So.2d 503 (Fla. 2d DCA 1989) (en banc); Channell v. Applie=
d=20
> Research, Inc., 472 So.2d 1260,1262 (Fla. 4th DCA 1985); Thomas v. Fed, In=
s.=20
> Agency, 51 B.R. 653 (Bankr. M.D. Fla. 1985).=20
> C. Whether the employee was discharged, constructively or otherwise, witho=
ut=20
> cause. This may be a factor which militates against the enforcement of a=20
> restrictive covenant. Similarly, the argument that, while employed, the em=
ployee=20
> was subjected to discrimination and/or employment actions which were illeg=
al=20
> or against public policy may create a defense toward enforcement of a=20
> covenant or other duty under the doctrines of unclean hands, or equitable=20=
estoppel,=20
> etc. Moreover, the employer's subsequent actions (i.e., anti-competitive=20
> activity, tortious interference, etc.) arguably could prevent it from obta=
ining=20
> the relief sought under these theories. In Lee & Associates, Inc., of Nort=
h=20
> Florida v. Lee /, the court held that where the specific contract language=
=20
> provided, a covenant not-to-compete in an employment contract did not appl=
y to=20
> the employee who was not discharged for good cause and did not voluntarily=
=20
> leave his employment.
> D. Whether the covenant was signed under duress and/or as a result of the=20
> employer's fraudulent inducement to enter employment. Similarly, the argum=
ent=20
> that promises given in return for the covenant were not fulfilled (i.e.,=20
> equitable estoppel) may be made, as well as the lack of consideration for=20=
the=20
> covenant. In Florida continued employment by the employee may be deemed=20
> consideration for a restrictive covenant.
> E. Whether the plaintiff sufficiently averred, through affidavits, the=20
> necessary elements of his or her application for injunctive relief. In the=
absence=20
> of a stipulation, "a trial court cannot make a factual determination based=
=20
> on an attorney's unsworn statements" and "is precluded from considering as=
=20
> fact unproven statements documented only by an attorney."=20
>=20
> F. Whether the employer may have waived its right to enforce the covenant=20=
if=20
> it failed to enforce prior "breaches" of the covenant and/or made=20
> representations that the covenant would not be enforced.
>=20
> G. Whether the employer asked the employee to waive rights that he could n=
ot=20
> waive. In Spencer Pest Control Co. of Florida, Inc. v. Smith /, a former=20
> employer sued for an injunction to restrain its former manager from violat=
ing a=20
> non-compete agreement. The trial court denied the temporary injunction, an=
d=20
> the former employer appealed. The appellate court held that an employee co=
uld=20
> not stipulate away the statutory requirement that an employer must show=20
> irreparable injury to enforce by injunction a contract to refrain from car=
rying on=20
> or engaging in a similar business within a reasonably limited time and are=
a.
>=20
> H. Whether the contract had been fully performed by both parties. In Sanz=20=
v.=20
> R.T. Aerospace Corp. /, the Court held that the trial court erred in=20
> entering a preliminary injunction pursuant to the non-compete clauses in a=
written=20
> employment agreement which had been fully performed and had expired by its=
=20
> very terms. In Storz Broadcasting Co. v. Courtney /, the parties executed=20=
an=20
> employment agreement for a specified number of years. This agreement simil=
arly=20
> contained a covenant not-to-compete for a specified period of time in the=20
> event the employee was terminated from the company. Approximately five mon=
ths=20
> prior to the end of the term of employment, the employee filed a declarato=
ry=20
> judgment action seeking a decree as to whether the provision would be=20
> enforceable upon the expiration of the employment contract. The trial cour=
t responded=20
> in the negative and this court affirmed, holding that the covenant not to=20
> compete related to termination of employment during the term of the agreem=
ent and=20
> was not applicable after the contract was fully performed. Stated another=20
> way, non-compete provisions of an agreement are only applicable if the emp=
loyee=20
> terminates his or her employment during the life of the written agreement.=
=20
> Once the agreement has been fully performed and expired, the non-compete=20
> clauses are no longer enforceable against the employee upon his terminatio=
n from=20
> the company. However, in Brenner v. Barco Chem. Div., Inc. /, non-compete=20
> provisions were held to survive the expiration of an employment agreement=20=
where=20
> 1) the contract expressly provided that its terms would continue after the=
=20
> contract's expiration if the employee continued to work without renewing t=
he=20
> contract; and 2) the contract expressly provided that the non-compete clau=
se=20
> would continue to be in effect following the expiration or termination of=20=
the=20
> employment.
>=20
> I. Furthermore, because a non-competition agreement is in restraint of=20
> trade, it is in derogation of the common law and must be strictly construe=
d=20
> against the alleged restraint.=20
>=20
> J. Whether any fraud on the part of the employer (as well as unclean hands=
=20
> and estoppel) should be asserted as barring relief.
>=20
> K. The argument that injunctive relief is inappropriate because, inter ali=
a,=20
> there is no irreparable harm and/or the harm, if any, is compensable by=20
> monetary damages, should be considered.
Although any counterclaims will mirror affirmative defenses, they also will=20
require the pleading of additional facts, as well as the required elements o=
f=20
the claims. Claims for tortious interference with prospective economic=20
advantantage or contractual relations (or similar torts in one's jurisdictio=
n) also=20
should be thoroughly explored. Interference with customers, suppliers,=20
prospective employees, and/or attempts to start a new business may give rise=
to a=20
tortious interference with the prospective economic advantage claim or other=
=20
similar claim. Tortious interference with contractual relationships involves=
=20
essentially the same elements, except that there must be an existing "contra=
ct" or=20
agreement with which the employer has interfered.
Obviously, all monetary and breach of contract claims should be asserted=20
specifically. These may include claims for payment of salary, severance pay,=
=20
commissions, expense reimbursement, vacation and sick pay, etc.
III. CONCLUSION
An employee must contend with many concerns when faced with restrictive=20
covenant litigation. Being cognizant of the time, expense and commitment req=
uired,=20
the most prudent course is for the employee to consult with counsel early an=
d=20
work out a plan of action before he or she leaves the place of employment. I=
n=20
view of the high stakes involved, all defenses to injunctive relief should b=
e=20
investigated and vigorously pursued.=20
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FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">Will be asking if we should=20=
take an active approach and have non compete rules invalid.<BR>
<BR>
Richard Moore<BR>
<BR>
<BR>
<BR>
=A0<BR>
<BR>
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n Orlando, FL<BR>
Law Offices of <BR>
N. James Turner, Esq., P.A.<BR>
<BR>
Eola Park Centre<BR>
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Suite 1110<BR>
Orlando, Florida 32801</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-CO=
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" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D4 FAMILY=3D"SANSSERIF" FACE=3D"=
Arial" LANG=3D"0"> </FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR=
: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Verdana" LANG=3D"0"></B><BR=
>
<BR>
<BR>
<BR>
<P ALIGN=3DCENTER></FONT><FONT COLOR=3D"#ffcc66" style=3D"BACKGROUND-COLOR:=
#0080ff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><B>REPRESE=
NTING THE EMPLOYEE<BR>
IN RESTRICTIVE COVENANT DISPUTES</FONT><FONT COLOR=3D"#ffffff" style=3D"BAC=
KGROUND-COLOR: #0080ff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=
=3D"0"></B><BR>
<BR>
<P ALIGN=3DLEFT>Restrictive covenant (covenants not-to-compete) litigation i=
nvolves very high stakes, particularly for the employee who faces a temporar=
y, or perhaps permanent, loss of his or her livelihood. Not only is it often=
expensive and time-consuming, but also emotionally and financially draining=
. Thus, at the beginning of the representation, the attorney representing an=
employee who may be bound by a covenant not-to-compete should carefully rev=
iew and consider the merits of the litigation, as well as the short-term and=
long-term business ramifications for the client.<BR>
<BR>
This paper will discuss some of the issues and decisions to be confronted an=
d the determinations to be made in such litigation.<BR>
<BR>
<BR>
<B>I. STATUTORY FRAMEWORK.</B><BR>
Section 542.33(2)(a) of the Florida Statutes was amended in 1990 and enacted=
to clarify the courts' discretion to enforce non?compete agreements. / This=
amendment expresses the legislature's intent that covenants not-to-compete,=
although validated by the statute, are not enforceable by injunction (1) if=
enforcement would be contrary to the public health, safety, or welfare; (2)=
if the covenant is unreasonable; or (3) if the proponent is unable to show=20=
irreparable harm if the covenant were not enforced according to its terms.<B=
R>
<BR>
</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"></FONT><FONT COLOR=3D"#ffffff"=
style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"A=
rial" LANG=3D"0"><BR>
Section 542.33 of the Florida Statutes states:<BR>
(1) Notwithstanding other provisions of this chapter to the contrary, each c=
ontract by which any person is restrained from exercising a lawful professio=
n, trade, or business of any kind, as provided by subsections (2) and (3) he=
reof, is to that extent valid, and all other contracts in restraint of trade=
are void.<BR>
<BR>
(2)(a) One who sells the goodwill of a business, or any shareholder of a cor=
poration selling or otherwise disposing of all of his shares in said corpora=
tion, may agree with the buyer, and one who is employed as an agent, indepen=
dent contractor, or employee may agree with his employer, to refrain from ca=
rrying on or engaging in a similar business and from soliciting old customer=
s of such employer within a reasonably limited time and area, so long as the=
buyer or any person deriving title to the goodwill from him, and so long as=
such employer, continues to carry on a like business therein. Said agreemen=
ts may, in the discretion of a court of competent jurisdiction, be enforced=20=
by injunction. However, the court shall not enter an injunction contrary to=20=
the public health, safety, or welfare or in any case where the injunction en=
forces an unreasonable covenant not to compete or where there is no showing=20=
of irreparable injury. However, use of specific trade secrets, customer list=
s, or direct solicitation of existing customers shall be presumed to be an i=
rreparable injury and may be specifically enjoined. In the event the seller=20=
of the goodwill of a business, or a shareholder selling or otherwise disposi=
ng of all his shares in a corporation breaches an agreement to refrain from=20=
carrying on or engaging in a similar business, irreparable injury shall be p=
resumed. </FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff"=
SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</BLOCKQUOTE><BR>
<BR>
<BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">The 1990 amendment restricts=
the availability of injunctive relief in non?compete agreement cases by req=
uiring parties to plead and prove irreparable injury. / However, the amendme=
nt did not disturb "the presumption of irreparable injury in connection with=
the use of trade secrets, customer lists, or direct solicitation of existin=
g customers." <BR>
<BR>
The procedure for enforcing a covenant not-to-compete usually begins with an=
application to the Court for injunctive relief, which, in Florida, is stric=
tly governed by rule. In particular, Rule 1.610 of the Florida Rules of Civi=
l Procedure provides as follows:</FONT><FONT COLOR=3D"#000000" style=3D"BAC=
KGROUND-COLOR: #0080ff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=
=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(a) Temporary Injunction.</F=
ONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FA=
MILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(1) A temporary injunction m=
ay be granted without written or oral notice to the adverse party only if:</=
FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2 F=
AMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(A) it appears from the spec=
ific facts shown by affidavit or verified pleading that immediate and irrepa=
rable injury, loss, or damage will result to the movant before the adverse p=
arty can be heard in opposition; and</FONT><FONT COLOR=3D"#000000" style=
=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial"=20=
LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(B) the movant's attorney ce=
rtifies in writing any efforts that have been made to give notice; and</FONT=
><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMIL=
Y=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(C) the reasons why notice s=
hould not be required.</BLOCKQUOTE></FONT><FONT COLOR=3D"#000000" style=3D"=
BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=
=3D"0"><BR>
<BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(2) No evidence other than t=
he affidavit or verified pleading shall be used to support the application f=
or a temporary injunction unless the adverse party appears at the hearing or=
has received reasonable notice of the hearing. Every temporary injunction g=
ranted without notice shall be endorsed with the date and hour of entry and=20=
shall be filed forthwith in the clerk's office and shall define the injury,=20=
state findings by the court why the injury may be irreparable, and give the=20=
reasons why the order was granted without notice if notice was not given. Th=
e temporary injunction shall remain in effect until the further order of the=
court.<BR>
<BR>
(b) Bond. No temporary injunction shall be entered unless a bond is given by=
the movant in an amount the court deems proper, conditioned for the payment=
of costs and damages sustained by the adverse party if the adverse party is=
wrongfully enjoined. When any injunction is issued on the pleading of a mun=
icipality or the state or any officer, agency, or political subdivision ther=
eof, the court may require or dispense with a bond, with or without surety,=20=
and conditioned in the same manner, having due regard for the public interes=
t. No bond shall be required for issuance of a temporary injunction issued s=
olely to prevent physical injury or abuse of a natural person.<BR>
<BR>
(c) Form and Scope. Every injunction shall specify the reasons for entry, sh=
all describe in reasonable detail the act or acts restrained without referen=
ce to a pleading or another document, and shall be binding on the parties to=
the action, their officers, agents, servants, employees, and attorneys and=20=
on those persons in active concert or participation with them who receive ac=
tual notice of the injunction.<BR>
<BR>
(d) Motion to Dissolve. A party against whom a temporary injunction has been=
granted may move to dissolve or modify it at any time. If a party moves to=20=
dissolve or modify, the motion shall be heard within 5 days after the movant=
applies for a hearing on the motion</BLOCKQUOTE></FONT><FONT COLOR=3D"#000=
000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=
=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">Probably the most important=20=
strategy decision to employ when faced with an application for injunctive re=
lief is to take the offensive immediately. The employee must attempt to turn=
the tables on the employer in order to gain a tactical advantage. Therefore=
, an employee who may be faced with the threat of imminent litigation throug=
h the filing of an injunction for alleged breach of a restrictive covenant m=
ay wish to consider a preemptive strike: filing a motion to dissolve or comm=
encing a declaratory judgment action, which would seek a determination of th=
e enforceability of the restrictive covenant and a declaration of its invali=
dity, and also may raise other related issues and claims. If a non-final app=
eal is necessary, it should be considered that in cases where there are no d=
isputed factual matters at issue, the appellate court will review the injunc=
tion de novo. / And, although the interpretation of a covenant not-to-compet=
e is a matter of law to be resolved by a trial court, an appellate court is=20=
nevertheless empowered to undertake an independent assessment of the covenan=
t's meaning. / Thus, an appellate court is not restricted in its ability to=20=
reassess the meaning and effect of the parties' non-competition agreement an=
d to reach a conclusion which differs from that of the trial court. /<BR>
<BR>
As the purpose of an injunction is to prevent irreparable harm, one such tac=
tic is to show that the employer will not be irreparably harmed absent the i=
njunction. However, where a plaintiff sufficiently demonstrates that a forme=
r employee is contacting its customers, the presumption of irreparable injur=
y attaches. /<BR>
<BR>
In addition, one of the requirements for the issuance of an injunction is a=20=
showing that success on the merits is likely. In Cordis Corp. v. Prooslin /,=
the court held that there was no abuse of discretion in denying a temporary=
injunction where the record showed doubt that the employer had the ability=20=
to succeed at trial. Accordingly, any available factual and legal arguments=20=
should be made which show that the claims have little, if any, chance of suc=
cess. Furthermore, a showing that the former employer does not have a legiti=
mate interest to protect and/or that the restrictive covenant does not reaso=
nably protect that interest will go a long way toward casting doubt on the e=
mployer's right to an injunction.<BR>
<BR>
It should be kept in mind that the ultimate goal is to declare the restricti=
ve covenant invalid, and, if appropriate, to recover on the employee's count=
erclaims. Therefore, that individual must have "clean hands" and be prepared=
to show the Court that no improper actions were committed in connection wit=
h his or her former employment. Any arguably wrongful actions by the employe=
e during the course of the litigation must be avoided at all costs.</FONT><F=
ONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=
=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><B>II. DEFENSES</B><BR>
After litigation has commenced, the following defenses should be considered=20=
and pursued:</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080=
ff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><B>A.</B> Whether the restri=
ctive covenant is unenforceable.</FONT><FONT COLOR=3D"#000000" style=3D"BAC=
KGROUND-COLOR: #0080ff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=
=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">1. No legitimate protectable=
interests exist on the part of the employer because:</FONT><FONT COLOR=3D"=
#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2 FAMILY=3D"SANSSERIF" F=
ACE=3D"Arial" LANG=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(a) no trade secrets exist;<=
/FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3=20=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(b) no customer lists exist=20=
and/or the "stolen" customers were the employee's pre-existing customers;</F=
ONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FA=
MILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(c) the employee had pre-exi=
sting knowledge and/or contacts which are legitimately able to be used for t=
he subsequent employer;</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-C=
OLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(d) if a "product" is involv=
ed, it is commonly known and sold and/or easily duplicated by the competitio=
n;</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=
=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(e) the true motivation of t=
he employer is the improper stifling of legitimate competition.</BLOCKQUOTE>=
</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">2. Whether the restrictive c=
ovenant is unreasonable in time and/or scope, possibly arguing:</FONT><FONT=20=
COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2 FAMILY=3D"SA=
NSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(a) if the covenant is "reas=
onable as to its duration and geographical limitation...." /; or a two?year=20=
restriction is reasonable on its face. / Furthermore, the employee must show=
that the term was unreasonable as it applied to him. / An injunction will n=
ot issue if the employee can demonstrates that the employer did not prove ir=
reparable injury stemming from the employee's employment with a competitor.=20=
</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(b) the covenant is not limi=
ted to present customers of the employer;</FONT><FONT COLOR=3D"#000000" sty=
le=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial=
" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(c) the employee has "busine=
ss" everywhere, so that enforcement of the covenant effectively prohibits an=
employee from working in the field and destroys his livelihood;</FONT><FONT=
COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"S=
ANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(d) the circumstances of the=
employee's termination (i.e., not for cause, as part of a layoff, for a pre=
textual, discriminatory or other illegal reason) are such that it is inequit=
able to enforce the covenant under the circumstances.</FONT><FONT COLOR=3D"=
#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" F=
ACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">(e) All agreements that rest=
rict one's right to work and earn a living are to be strictly construed as b=
eing in derogation of common law. In Marshall v. Gore, 506 So.2d 91, 92 (Fla=
. 2d DCA 1987) the court stated:</FONT><FONT COLOR=3D"#000000" style=3D"BAC=
KGROUND-COLOR: #0080ff" SIZE=3D2 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=
=3D"0"><BR>
<BLOCKQUOTE TYPE=3DCITE style=3D"BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT=
: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">Perhaps the most fundamental=
to our determination is that '[t]he right to work, earn a living and acquir=
e and possess property from the fruits of one's labor is an inalienable righ=
t.' (citing Lee v Delmar, 66 So.2d 252, 255 (Fla. 1953)).</BLOCKQUOTE></FONT=
><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMIL=
Y=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">Furthermore, Article 1, Sect=
ion 11, of the Florida Constitution protects the right and opportunity to mo=
ve freely within the labor force for one's own advancement and economic prod=
uctivity. All agreements in derogation of the common law and these fundament=
al rights must be strictly construed and zealously guarded. See generally Ha=
pney v. Central Garage, Inc., 579 So.2d 127 (Fla. 2d DCA 1991).</BLOCKQUOTE>=
</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</BLOCKQUOTE><BR>
<BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">B. Whether the employer brea=
ched the contract between it and the former employee prior to the employee's=
alleged breach, thereby obviating any obligation on the part of the employe=
e to comply with same. Florida law holds that an employer's breach of an emp=
loyment contract is a relevant factor in determining whether an employer is=20=
entitled to a temporary injunction enforcing a covenant not to compete. In t=
he case Cordis Corporation v. Prooslin, 482 So.2d 486 (Fla. 3d DCA 1986), th=
e court affirmed the trial court's decision to deny a temporary injunction w=
here there was evidence that the employer's breach of the underlying contrac=
t cast doubt on whether or not the employer was clearly entitled to success=20=
on the merits. The Prooslin court recognized that if an employer is in breac=
h or default under an agreement or when he gives good cause for a former emp=
loyee's non-performance he has no standing in equity to seek an injunction.=20=
The Prooslin court noted that the trial court's discretion in granting a tem=
porary injunction should be guided by established rules and principles of eq=
uity jurisprudence. In the case of Troup v. Heacock, 367 So.2d 691 (Fla. 1st=
DCA 1979), the appellate court reversed the trial court's decision that gra=
nted a motion for temporary injunction. The appellate court noted that the e=
mployer had materially breached the employment contract and therefore the co=
venant not to compete was unenforceable by the employer. The Troup court sta=
ted that if the injunction were allowed to stand not only would it be contra=
ry to equity but it would result in inverse peonage. Numerous other Florida=20=
cases have recognized the a prior material breach by an employer will discha=
rge an employee from abiding by a covenant not to compete. Generally Seaboar=
d Oil Co. v Donovan, 128 So. 821 (Fla. 1930); Sarasota Beverage Company v. J=
ohnson, 551 So.2d 503 (Fla. 2d DCA 1989) (en banc); Channell v. Applied Rese=
arch, Inc., 472 So.2d 1260,1262 (Fla. 4th DCA 1985); Thomas v. Fed, Ins. Age=
ncy, 51 B.R. 653 (Bankr. M.D. Fla. 1985). </FONT><FONT COLOR=3D"#000000" st=
yle=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Aria=
l" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">C. Whether the employee was=20=
discharged, constructively or otherwise, without cause. This may be a factor=
which militates against the enforcement of a restrictive covenant. Similarl=
y, the argument that, while employed, the employee was subjected to discrimi=
nation and/or employment actions which were illegal or against public policy=
may create a defense toward enforcement of a covenant or other duty under t=
he doctrines of unclean hands, or equitable estoppel, etc. Moreover, the emp=
loyer's subsequent actions (i.e., anti-competitive activity, tortious interf=
erence, etc.) arguably could prevent it from obtaining the relief sought und=
er these theories. In Lee & Associates, Inc., of North Florida v. Lee /,=
the court held that where the specific contract language provided, a covena=
nt not-to-compete in an employment contract did not apply to the employee wh=
o was not discharged for good cause and did not voluntarily leave his employ=
ment.</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff" SIZ=
E=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">D. Whether the covenant was=20=
signed under duress and/or as a result of the employer's fraudulent induceme=
nt to enter employment. Similarly, the argument that promises given in retur=
n for the covenant were not fulfilled (i.e., equitable estoppel) may be made=
, as well as the lack of consideration for the covenant. In Florida continue=
d employment by the employee may be deemed consideration for a restrictive c=
ovenant.</FONT><FONT COLOR=3D"#000000" style=3D"BACKGROUND-COLOR: #0080ff"=20=
SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0"><BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">E. Whether the plaintiff suf=
ficiently averred, through affidavits, the necessary elements of his or her=20=
application for injunctive relief. In the absence of a stipulation, "a trial=
court cannot make a factual determination based on an attorney's unsworn st=
atements" and "is precluded from considering as fact unproven statements doc=
umented only by an attorney." <BR>
<BR>
F. Whether the employer may have waived its right to enforce the covenant if=
it failed to enforce prior "breaches" of the covenant and/or made represent=
ations that the covenant would not be enforced.<BR>
<BR>
G. Whether the employer asked the employee to waive rights that he could not=
waive. In Spencer Pest Control Co. of Florida, Inc. v. Smith /, a former em=
ployer sued for an injunction to restrain its former manager from violating=20=
a non-compete agreement. The trial court denied the temporary injunction, an=
d the former employer appealed. The appellate court held that an employee co=
uld not stipulate away the statutory requirement that an employer must show=20=
irreparable injury to enforce by injunction a contract to refrain from carry=
ing on or engaging in a similar business within a reasonably limited time an=
d area.<BR>
<BR>
H. Whether the contract had been fully performed by both parties. In Sanz v.=
R.T. Aerospace Corp. /, the Court held that the trial court erred in enteri=
ng a preliminary injunction pursuant to the non-compete clauses in a written=
employment agreement which had been fully performed and had expired by its=20=
very terms. In Storz Broadcasting Co. v. Courtney /, the parties executed an=
employment agreement for a specified number of years. This agreement simila=
rly contained a covenant not-to-compete for a specified period of time in th=
e event the employee was terminated from the company. Approximately five mon=
ths prior to the end of the term of employment, the employee filed a declara=
tory judgment action seeking a decree as to whether the provision would be e=
nforceable upon the expiration of the employment contract. The trial court r=
esponded in the negative and this court affirmed, holding that the covenant=20=
not to compete related to termination of employment during the term of the a=
greement and was not applicable after the contract was fully performed. Stat=
ed another way, non-compete provisions of an agreement are only applicable i=
f the employee terminates his or her employment during the life of the writt=
en agreement. Once the agreement has been fully performed and expired, the n=
on-compete clauses are no longer enforceable against the employee upon his t=
ermination from the company. However, in Brenner v. Barco Chem. Div., Inc. /=
, non-compete provisions were held to survive the expiration of an employmen=
t agreement where 1) the contract expressly provided that its terms would co=
ntinue after the contract's expiration if the employee continued to work wit=
hout renewing the contract; and 2) the contract expressly provided that the=20=
non-compete clause would continue to be in effect following the expiration o=
r termination of the employment.<BR>
<BR>
I. Furthermore, because a non-competition agreement is in restraint of trade=
, it is in derogation of the common law and must be strictly construed again=
st the alleged restraint. <BR>
<BR>
J. Whether any fraud on the part of the employer (as well as unclean hands a=
nd estoppel) should be asserted as barring relief.<BR>
<BR>
K. The argument that injunctive relief is inappropriate because, inter alia,=
there is no irreparable harm and/or the harm, if any, is compensable by mon=
etary damages, should be considered.</BLOCKQUOTE></FONT><FONT COLOR=3D"#000=
000" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=
=3D"Arial" LANG=3D"0"><BR>
<BR>
</FONT><FONT COLOR=3D"#ffffff" style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D2=
FAMILY=3D"SANSSERIF" FACE=3D"Arial" LANG=3D"0">Although any counterclaims w=
ill mirror affirmative defenses, they also will require the pleading of addi=
tional facts, as well as the required elements of the claims. Claims for tor=
tious interference with prospective economic advantantage or contractual rel=
ations (or similar torts in one's jurisdiction) also should be thoroughly ex=
plored. Interference with customers, suppliers, prospective employees, and/o=
r attempts to start a new business may give rise to a tortious interference=20=
with the prospective economic advantage claim or other similar claim. Tortio=
us interference with contractual relationships involves essentially the same=
elements, except that there must be an existing "contract" or agreement wit=
h which the employer has interfered.<BR>
<BR>
Obviously, all monetary and breach of contract claims should be asserted spe=
cifically. These may include claims for payment of salary, severance pay, co=
mmissions, expense reimbursement, vacation and sick pay, etc.<BR>
<BR>
<BR>
<B>III. CONCLUSION</B><BR>
An employee must contend with many concerns when faced with restrictive cove=
nant litigation. Being cognizant of the time, expense and commitment require=
d, the most prudent course is for the employee to consult with counsel early=
and work out a plan of action before he or she leaves the place of employme=
nt. In view of the high stakes involved, all defenses to injunctive relief s=
hould be investigated and vigorously pursued.</FONT><FONT COLOR=3D"#000000"=
style=3D"BACKGROUND-COLOR: #0080ff" SIZE=3D3 FAMILY=3D"SANSSERIF" FACE=3D"A=
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