On April 17, 2013, Florida's Fourth District Court of Appeal issued a decision in Zodiac Records, Inc., et al., v. Choice Environmental Services, No. 4D12-906 (Fla. 4th DCA April 17, 2013), reversing a trial court's order enforcing a non-compete agreement. The trial court in Zodiac considered an employer's motion for a preliminary injunction based on a former consultant's alleged violations of a non-compete, non-solicitation and trade secret confidentiality agreement. Id. at *2. Generally speaking, when an employer seeks to enforce a non-compete agreement against a former employee or contractor, the court will presume the non-compete is reasonable if the duration period in the agreement does not exceed two years. See Fla. Stat. § 542.335(1)(d)(1). However, if the non-compete is based upon the protection of trade secrets, the presumption of reasonable duration is extended from two years to five years. See Fla. Stat. § 542.335(1)(e); see also, Zodiac at *2.
During the trial in Zodiac, counsel for the party opposing enforcement of the non-compete agreement (the consultant), stated that if the court were going to consider whether trade secrets were used by the consultant, the court would need to hear evidence on the issue. Zodiac at *2. The trial court advised the parties that "[t]here is no trade secrets as of right now. I mean, [the employer's counsel] has, for purposes of what we are doing, moved that aside." Id. At the end of the trial, the court entered an injunction in favor of the employer, however, it based its decision on the consultant's alleged use of trade secret information. Id. at *3.
On appeal, the consultant argued that the trial court violated the consultant's procedural due process rights. Zodiac at *1. The Fourth District agreed, finding that the employer stipulated at trial that it was not relying on trade secrets and that the employer therefore waived its right to argue that the duration of the non-compete agreement was reasonable. Id. In making its findings, the Fourth District noted that "[n]one of the elements involved in the notion of procedural due process has greater importance that the right to be heard." Id. at *3, citing Miller v. Miller, 691 So.2d 528, 529 (Fla. 4th DCA 1997). The court further observed that a "trial court may not grant a former employer's motion for a temporary injunction against a former employee without first permitting the former employee 'to put on its evidentiary case.'" JonJuan Salon, Inc. v. Acosta, 922 So.2d 1081, 1085 (Fla. 4th DCA 2006). Ultimately, the court in Zodiac found that granting the employer an injunction after the court had held that there were "no trade secrets as of right now" denied the consultant "a meaningful opportunity to be heard on the issue of whether trade secrets were implicated ..."Id. at *3.
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