This is an introduction that I wrote earlier today for a brief in one of our non-compete cases currently pending in Tampa, Florida. The team wrote the brief, I wrote the intro. Unfortunately, over the past twenty years or so, many judges in Florida trial courts – both state and federal – have simply gotten the law wrong. It happens. Consider this: The entire United States District Court for the Southern District of New York got the Martin Act wrong until the venerable Judge Marrero set the record straight. There was a time when anybody challenging the doctrine of Martin Act preemption was basically laughed out of Court. But Judge Marrero ended all of that with one brilliant, comprehensive opinion. We are facing a similar problem in Florida’s trial courts. Many judges view non-compete cases solely as breach of contract matters. But that is simply not correct. The framework laid out below is the correct framework through which to evaluate non-compete agreements. The general underpinnings of this framework apply not only to Florida law but to non-compete law in many jurisdictions.
INTRODUCTION
This case presents a classic example of bad faith non-compete litigation and a complete failure to understand the legal framework through which non-compete agreements are evaluated. The Florida Legislature, Florida Supreme Court, and Florida District Courts of Appeal have repeatedly mandated that non-compete agreements are illegal restraints of trade unless they are necessary to protect a legitimate business interest. As such, any non-compete agreement must be evaluated through two separate lenses. The first lens is the antitrust or restraint of trade lens. The second lens is the contract lens.
In evaluating a non-compete agreement through the antitrust or restraint of trade lens, the Court must first consider whether the restriction at issue is necessary to protect a legitimate business interest. It is the Plaintiff’s burden to plead and prove the existence of such legitimate interests. It is the Plaintiff’s burden to establish that, but for enforcement of the restrictions at issue, the Defendant could engage in unfair competition. This requires an assessment of the relevant market to determine whether or not the restraint at issue is reasonable and necessary. To be clear: The first lens is antitrust law. That is axiomatic because the relevant law, Florida Statutes 542.335, is codified within the Chapter 542 – The Florida Antitrust Act.
Only after the Court establishes that the restraint is reasonable, necessary and permissible under antitrust principles does the Court turn to evaluating the case as a potential breach of contract matter. In the instant case, the Plaintiff, Trifecta, essentially skips the antitrust lens, offers only boilerplate allegations about its purported legitimate business interest, and treats the case as a simple breach of contract matter. Trifecta’s analysis is simply and completely wrong. When analyzed through the proper framework, Trifecta’s claims fail for a litany of reasons. See White v. Mederi Caretenders Visiting Servs. of Se. Fla., LLC, 226 So. 3d 774 (Fla. 2017) (stating that Florida’s non-compete law does not protect covenants “whose sole purpose is to prevent competition per se”).
First, Trifecta and MDSI are dramatically different businesses. Trifecta sells used, unauthorized, grey market networking products whereas MDSI operates in the primary market where all of its sales, new or used, are authorized by the respective manufacturers. There is no evidence whatsoever of any actual or threatened unfair competition. Second, Trifecta’s generic references to its customer and other relationships do not carry the day. Trifecta has not put any customer or other relationships at issue because it has no specific facts to support its generic contentions. Third, Trifecta’s generic, self-serving references to confidential information and trade secrets are devoid of any specific facts. That is because Trifecta knows that there is no confidential information at issue. Fourth, Trifecta cannot establish any legitimate interest in training because it never offered Godwin training that was extraordinary and beyond the industry standard. Fifth, the actual terms of the non-compete agreement do not purport to restrict Godwin from working a company like MDSI because he is selling fundamentally different products and services to fundamentally different universe of customers. Sixth, even if Trifecta is given a presumption of irreparable harm, Defendants have rebutted that presumption. Trifecta cannot point to a single instance of harm to its business, whether actual or threatened.
In spite of the foregoing, Trifecta comes to this Court claiming that the matter constitutes an emergency. If so, this is the most vague, generic, boilerplate emergency that the undersigned counsel has ever seen. Because emergencies always involve specific facts. And as for specific facts, Trifecta offers none beyond this: Godwin signed a non-compete agreement. To be clear: Trifecta does not allege any actual, specific facts regarding legitimate business interests or irreparable harm. As such, it’s claimed emergency rests solely on the assumption that non-compete agreements are always enforceable and non-compete cases always constitute emergencies. Both of those assumptions are false.
In short, Trifecta has filed a frivolous complaint that comes dangerously close to fraud on the Court. And to make matters worse, cried wolf about an emergency when no such emergency exists. Trifecta banks on this Court ignoring the weight of authority and treating this matter as a black-and-white contract dispute. But Florida jurisprudence is clear: Restrictive covenants are restraints of trade. Trifecta parrots Florida Statute section 542.335, but fails to plead—let alone prove—the existence of any legitimate business interests to support the issuance of an injunction. Absent such a legitimate business interest, Trifecta’s case is a meritless attempt to stifle lawful competition. Trifecta’s goal is clear: Rairoad the Defendants into a quick “emergency” injunction hearing, ignore well-established Florida law, obtain an injunction from the bench and force a quick settlement. Because Trifecta well knows that its claims are meritless and will eventually be exposed as such. The Court should not tolerate Trifecta’s bad faith tactics. Trifecta’s Motion must be denied it its entirety and Trifecta should be sanctioned for its conduct to the fullest extent permitted by law.
Jonathan Pollard is a competition lawyer based in Fort Lauderdale, Florida. He has extensive experience litigating non-compete cases. He has appeared in or on the New York Times, Bloomberg, PBS News Hour, Law360, FundFire, Inc. Magazine and more. His office can be reached at 954-332-2380.
