USA – FLORIDA Trends and Developments Contributed by: Stuart Singer and Carl Goldfarb, Boies Schiller Flexner
Enforcing the CHOICE Act Against a Pre-Emptive Lawsuit by Workers in an Employee-Friendly State Sometimes, the clash over enforcement of Florida’s CHOICE Act takes place in courts of an employer- friendly state (such as California), when a worker who is planning on taking a job for a competitor files a pre-emptive action, or a responsive action, seeking a judgment that the non-compete is unenforceable as against the public policy of the forum state. Such cases have at times been successful. See, for example, Freeman Expositions, Inc v Global Experi- ence Specialists, Inc , 2017 WL 1488269, at *4 (CD Cal, 24 April 2017) – “[e]nforcing the forum selection clause would contravene California’s strong public policy against non-compete agreements”. See also: • Jacam Chemical Company 2013, LLC v Shepard , 2023 WL 22139, at *2 (DND, 3 January 2023) – “[t] o enforce the Kansas forum selection in this case clause would clearly violate North Dakota’s strong public policy against non-compete agreements”; • Osborne v Brown & Saenger, Inc , 904 NW 2d 34, 38–39 (SD 2017) – refusing to enforce a choice-of- law provision and stating “[s]imply put, one may not contract for application of another state’s law or forum if the natural result is to allow enforcement of a non-compete agreement in violation of North Dakota’s long-standing and strong public policy against non-compete agreements”; and • Lapolla Industries, Inc v Hess , 750 SE 2d 467, 476 (Ga Ct App 2013) – affirming the decision to not enforce contractual forum selection and choice- of-law clauses that would have likely resulted in enforcement of the covenant not to compete in violation of Georgia law. However, a long line of California cases say that a venue provision, if freely negotiated, does not violate the public policy of California, even if it is part of a non-compete. The decision in Mechanix Wear, Inc v Performance Fabrics, Inc , 2017 WL 417193 (CD Cal, 31 January 2017) is exemplary. There, the court stated the plaintiffs’ argument that a “forum selection clause is unreasonable because it arises in a non-compete agreement, and California has a strong public pol -
Thus, under Keener , federal courts (at least in the Eleventh Circuit) should not issue a broad injunction enjoining an out-of-state employee from working in states such as California, where non-competes are unenforceable as against public policy (Id); see also Advanced Marketing Int’l, Inc v Ferguson , 2006 WL 1679417, *3 (MD Fla., 14 June 2006) (dictum) (“inter - ests of federal comity” prevent a Florida court from enforcing a restrictive covenant against a California resident, even with a Florida choice-of-law and venue selection provision). This limitation on the permissible scope of injunctive relief could become particularly important because the CHOICE Act eliminated any geographic limitation on covered agreements. As noted, the CHOICE Act contains a rebuttable pre - sumption requiring issuance of a preliminary injunc - tion (see Fla. Section 542.45 (5)(a)). The general Flori - da law on non-competes also creates a presumption, stating that “violation of an enforceable restrictive covenant creates a presumption of irreparable inju - ry” (Id at 542.335 (1)(j)). Such a presumption raises a “knotty question” – whether a federal court consider - ing a preliminary injunction motion in a diversity case must apply the state law presumption or follow federal equity practice. See Vital Pharm, Inc v Alfieri , 23 F 4th 1282, 1292 (11th Cir 2022). In an unpublished decision that does not constitute binding precedent, the Court of Appeals for the 11th Circuit found that presumption of irreparable harm did not violate the traditional approach for deciding on injunctive relief under federal equity practice and the Federal Rule of Civil Procedure 65. See TransUnion Risk & Alt Data Sols, Inc v MacLachlan , 625 F App’x 403, 406 (11th Cir 2015) (per curiam). However, one 11th Circuit judge disagreed in a subse - quent concurrence, Vital Pharm, Inc , 23 F 4th at 1293 (Pryor, chief judge, concurring), and so did a district court judge in Blue-Grace Logistics LLC v Fahey , 340 FRD 460, 466 (MD Fla. 2022). Thus, whether such a presumption may apply in federal court has not been definitively decided.
304 CHAMBERS.COM
Powered by FlippingBook