The Villages brands itself as Florida’s friendliest retirement community. Although that may be true for the residents, its hardly true for current and former employees. Properties of the Villages (“POV”) is The Villages’ captive real estate agency that dominates home sales in the community. In December 2019, POV sued seven former real estate agents who had left the Company and started their own agency. After departing from POV, the seven agents had little choice but to go into business for themselves: Their employment agreements contain extremely broad non-compete restrictions. By their terms, those restrictions prevented the former employees from working for any agency that had represented a buyer or seller of a property in The Villages. That would have blocked them from working in half the state, if not beyond.
In June, the seven defendants – who now operate KD Premier Realty in Lady Lake, Florida – engaged Jonathan Pollard and Pollard PLLC to take over their defense. In opposing POV’s request for a preliminary injunction, Pollard PLLC argued that the non-compete restrictions are illegal and unenforceable because they are not supported by any legitimate business interest. Pollard PLLC maintained that the only possible legitimate business interest in play was customer relationships. But that POV had failed to identify any specific, protectable customer relationships that KD and the seven Defendants had threatened. There was no evidence of the Defendants taking clients who were in the pipeline or actively under contract.
In August, a federal Magistrate Judge recommended that the Court deny a preliminary injunction against the Defendants and largely agreed with Pollard’s argument. The result has sent POV scrambling and changing its position. Initially, POV opposed holding a full-blown evidentiary hearing on its motion for preliminary injunction. Instead, POV argued that the record was well-established through declarations and depositions and that no more evidence was necessary. Now, POV is objecting to the Magistrate Judge’s recommendation and seeking permission to file additional evidence. POV’s Director of Sales Bobby Gulati submitted one declaration earlier in the case and sat for a deposition. But according to POV, that is not enough. POV is now seeking leave to submit another declaration from Mr. Gulati, essentially to explain to the Court why a preliminary injunction should be issued. Not only that, but POV wants the Court to allow them to file the declaration under seal, meaning its contents are kept strictly confidential and not available to the public. Pollard and his clients naturally oppose this request. In their most recent court filing, Pollard PLLC argued as follows:
In reality, POV’s argument is that it was surprised by the Magistrate’s application of existing Florida non-compete law to the facts of this case. But ignorance of well-established law is not a basis for allowing POV to submit yet another declaration from Mr. Gulati. Cf. Albritton v. Ferrera, 913 So. 2d 5, 9 (Fla. 1st DCA 2005) (“Because these principles are well established, [parties and counsel] are expected to know them . . . and to be held accountable for that knowledge”). After all, Mr. Gulati already submitted one declaration and sat for a deposition. POV’s strategy here is obvious: The facts that POV originally put forward were not enough to obtain a preliminary injunction. So now, armed with the benefit of hindsight, POV seeks to adduce new and better facts. The Court should not countenance that, particularly in the context of a preliminary injunction. A preliminary injunction is an extraordinary remedy to be granted only upon a showing of actual and imminent irreparable harm. Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000) (en banc). If POV had a legitimate factual basis for obtaining injunctive relief or real evidence of actual and imminent irreparable harm, they would have articulated that in their papers, in Mr. Gulati’s first declaration, or in Mr. Gulati’s deposition. It should not take eight months of litigation and multiple opportunities to testify for a movant to articulate why it is entitled to injunctive relief. Where it does, the movant almost certainly is not entitled to the extraordinary remedy of a preliminary injunction.
The Defendants’ trial counsel Jonathan Pollard adamantly maintains that POV is not entitled to a preliminary injunction. Quoting Pollard, “In my opinion, for the past twenty or thirty years, district courts have been far too willing to grant preliminary injunctions in non-compete cases. That violates binding 11th Circuit law. Preliminary injunctions are supposed to be for extraordinary circumstances and rarely granted. Non-compete abuse is rampant in Florida and that needs to be reigned in. The Magistrate Judge correctly applied well-established Florida law and reached the right conclusion: That these non-compete agreements are unenforceable and that my clients should be allowed to continue their careers as real estate agents without having to move hundreds of miles away to avoid The Villages. In the event of any injunction, we will seek an injunction bond of at least $5 million.”
Trial is set for April 2021. The case is Properties of the Villages, Inc. v. Kranz et. al., Case No. 5:19-CV-647 (MDFL).
Pollard PLLC has extensive experience litigating complex non-compete, trade secret, and unfair competition matters. It represents clients throughout Florida and beyond. Pollard PLLC can be reached at 954-332-2380.
