In Florida, a party that wants to enforce a non-compete agreement typically does so by filing a complaint for injunctive relief in Circuit Court. Once the party commences the non-compete litigation, the Circuit Court must decide whether to issue a final or non-final order enforcing the agreement. If one of the parties believes that the trial court committed reversible error, that party can file a notice of appeal with an appellate court – the District Court of Appeal. This post addresses one of the key issues on appeal, that is the standard of review used by an appellate court when reviewing the decision of the trial court.
The standard of review is a fundamental aspect of appellate litigation. Generally speaking, the standard of review is the level of deference an appellate court gives to the decisions of a lower court. If an appellate court applies an "abuse of discretion" standard of review, the court provides the trial court decision with more deference than if the court applies a "de novo" standard of review. Applying the abuse of discretion standard, the appellate court decides whether the trial court, in rendering its decision, abused its discretion. In contrast, under a de novo standard of review, the appellate court gives very little deference to the trial court and instead considers the legal issues on its own.
Florida's Fifth District Court of Appeal recently addressed the appropriate standard of review for non-compete litigation in Heiderich v. Florida Equine Veterinary Services, Inc., 86 So.3d 527 (Fla. 5th DCA 2012). In Heiderich, a veterinarian service provider filed suit to enforce a non-compete agreement against one of its former veterinarians. The trial court entered a non-final order enforcing the non-compete agreement through a temporary injunction. The employee appealed the trial court's order granting the injunction. Id. at 528-29.
On appeal, the Fifth District reversed the trial court. The appellate court based its reversal on its finding that the trial court incorrectly interpreted the parties' non-compete agreement. When reviewing the decision of the trial court, the appellate court undertook "an independent assessment" of the meaning of the covenant not to compete. Id. at 529 citing Envt'l. Servs., Inc. v. Carter, 9 So.3d 1258, 1263 (Fla. 5th DCA 2009)(quoting Coastal Loading, Inc. v. Tile Roof Loading, Inc., 908 So.2d 609, 611 (Fla. 2d DCA 2005). When construing a non-compete agreement, Florida law requires that a court "construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement. A court shall not employ any rule of contract construction that requires the court to construe a restrictive covenant narrowly, against the restraint, or against the drafter of the contract." Id., citing Fla. Stat. § 542.335(1)(h).
The Fifth District in Heiderich reversed the trial court and in doing so provided its own interpretation of the parties' non-compete agreement. The court applied a de novo standard of review that is consistent with Florida law. See Emergency Assocs. of Tampa, P.A. v. Sassano, 664 So.2d 1000, 1002 (Fla. 2d DCA 1995)(holding that "although the interpretation of a covenant not to compete is a matter of law to be resolved by a trial court, an appellate court is nevertheless empowered to undertake an independent assessment of the covenant's meaning."); see also, Morgan v. Herff Jones, Inc., 883 So.2d 309, 313 (Fla. 2d DCA 2004)(stating that the issue of "whether a non-compete covenant arose under the contract is subject to de novo review."); Coastal Loading, Inc. v. Tile Roof Loading, Inc., 908 So.2d 609 (Fla. 2d DCA 2005)(holding that "we conduct a de novo review of the interpretation of the covenant not to compete.")
It is helpful for parties in non-compete litigation to keep in mind the standard of review on appeal. If the trial court is interpreting the terms of the agreement, the losing party can appeal the trial court's decision wherein the appellate court applies a de novo standard of review. The appellate court, in essence, will look at the legal issues all over again, providing the trial court with limited discretion in its analysis.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
