On Tuesday, Pollard PLLC won a stay pending appeal from Florida’s 4th District Court of Appeal. The underlying case raises a number of important issues related to Florida non-compete law, tortious interference, agreed injunctions, due process, and contempt proceedings. The facts are relatively straight-forward: Firm client ESP Systems d/b/a MedTemps is a nurse staffing company. MedTemps hired an independent contractor who was subject to a non-compete agreement with his former employer, Nightingale Nurses, also a nurse staffing company. Nightingale sued the former employee and that case was quickly resolved via an agreed injunction. The problem: That employee kept working for MedTemps (this is before Pollard PLLC came into the picture).
Fast forward: Nightingale filed a motion for contempt seeking to hold not only the ex-employee in contempt, but also seeking to shut down MedTemps. Nightingale argued that the ex-employee was integrally involved in the launch of MedTemps (a company itself founded by another former Nightingale employee), that MedTemps was founded using stolen corporate secrets and proprietary methods and that – as a result, MedTemps, its owners and various of its employees should be held in contempt, enjoined from competing against Nightingale and forced to disgorge hundreds of thousands if not millions of dollars in profits.
MedTemps countered arguing that it was not subject to an agreed injunction which, by its plain terms, was binding only on the ex-employee and those under his control. MedTemps (and the MedTemps individuals, represented by Pollard PLLC) also raised numerous other arguments related to the underlying agreed order. They argued that the order was void for not complying with Florida Rule 1.610 regarding form of injunctions. They argued that the order was – at a minimum – ambiguous, and that parties cannot be held in contempt of an ambiguous order. They argued that extending the order to bind the MedTemps parties violated basic due process.
The Palm Beach trial court rejected those arguments. The contempt proceedings spanned several months from June of 2016 until December 2016. Nightingale hit MedTemps with copious amounts of discovery and MedTemps was required to produce thousands of pages of corporate documents and emails. There were several days of hearings in July and then again in November. On December 20th, 2016, the trial court entered an order holding all of the MedTemps individuals in contempt (but reserving on a contempt ruling against MedTemps itself). The contempt orders required the owners of MedTemps to immediately stop competing against Nightingale and cease any action prejudicial to Nightingale’s interests (you can’t make this up) for 6 months. The contempt orders also required the individuals to pay Nightingale compensatory contempt damages and attorneys’ fees and ordered further proceedings to determine that amount. Based on what Nightingale was seeking and attorneys’ fees alone, that number easily would have exceeded $1 million and probably approached $2 million.
On January 3, 2017, the firm filed a Notice of Appeal in Florida’s 4th DCA. The firm is no stranger to appellate practice, having won victories in both the United States Court of Appeals for the Eleventh Circuit and Florida’s 5th District Court of Appeals in recent years. On the afternoon of January 6th, the firm filed an Emergency Motion to Stay Enforcement of the contempt orders. Only hours later, the 4th DCA issued an order temporarily staying the contempt proceedings and ordering Nightingale to file a response. Nightingale filed its response. The firm moved for and was granted leave to file a reply in further support of its request for a stay. Today, on February 14th, the 4th DCA issued an order staying the contempt proceedings pending appeal. It is incredibly rare to prevail on appeal and even rarer still to secure a stay pending appeal.
“It’s a tremendous win for our clients and a tremendous victory for the firm,” said Pollard. “We are privileged to practice in the 4th DCA and I am so grateful for their thoughtfulness and their wisdom. This is also a victory for justice. I look forward the ultimate decision on appeal, vindicating our clients’ interests completely and doing my part to help clarify the law of restrictive covenants, agreed injunctions and contempt proceedings.”
Jonathan Pollard and Christopher Prater were the primary attorneys on the case for the firm. Pollard said, “Nothing sweeter than calling your client and saying stay granted! Happy Valentine’s day.”
Pollard PLLC is a litigation boutique based in Fort Lauderdale, Florida and focused on competition law. The firm and its attorneys have extensive experience litigating a variety of complex commercial cases, with a particular emphasis on non-compete, trade secret and trademark litigation. Pollard, who began his career at the litigation powerhouse Boies, Schiller & Flexner, is widely quoted on non-compete issues and has recently appeared in Bloomberg, FundFire, the Wall Street Journal and on PBS NewsHour among others. The firm’s office can be reached at 954-332-2380.