3. The South Miami Engineering Company of Florida (SMEC) recently began marketing a unique test that can predict what the stability of soil will be during a flood. This test benefits property owners because it allows them to determine whether a building will be structurally stable in flood conditions. No one else performs this test in Florida. SMEC did not invent the test, but instead purchased the rights to a license for the entire geographical area of south Florida from a vendor.

SMEC hired and trained Xavier, an experienced engineer, to perform this test. SMEC provided Xavier an employment contract for Xavier to sign. The contract contained the following non-competition clause:

"In the event Xavier leaves the employ of SMEC, he agrees not to perform or provide similar testing services within the State of Florida for six years. Xavier read and signed the agreement. After one year, Xavier quit work at SMEC and opened up his own engineering company. His company provided engineering services, including a test very similar to the one performed by SMEC. The test was not developed from any information gained during Xavier's employment at SMEC.Instead, one of SMEC's competitors developed a different prototype of the test and licensed its use to Zavier's company. SMEC's sales declined after Xavier's company began performing the similar test.

When SMEC learned that Xavier had opened his own engineering firm and was performing a similar test, it sued Xavier for breach of the noncompetition clause.

a. Is the non-competition provision between SMEC and Xavier enforceable? Explain.

(Florida courts will rarely refuse to enforce a non-compete agreement due to its length or geographic scope. Instead, courts often employ the "blue pencil" to reign impermissibly broad terms within the limits of Fla. Stat. 542.335) See, final exam attachment.

b. Assuming the non-competition provision is enforceable and was breached by Xavier,what types of damages might SMEC be entitled to?

Tip: weeks 3 and 4 readings