Question
Need help is answering the following questions . Story line is below Element 1: Defendant signed a written restrictive covenant. What will the plaintiff assert?
Need help is answering the following questions
. Story line is below
Element 1:Defendant signed a written restrictive covenant.
What will the plaintiff assert?
What might the plaintiff offer as evidence?
Element 2:The restraints of time, geography, and line of business are reasonably necessary to protect a legitimate business interest.
What will the plaintiffassertin answer to the following questions:
--What is/are the legitimate business interest(s) the Agreement protects?
--How long in time is the restriction in the Agreement?
--How broad in geography is the restriction in the Agreement?
--How does the Agreement define the "line of business," i.e., what duties/roles Joseph is prohibited from playing and what kinds of companies is she prohibited from working for?
What might the plaintiff offer asevidenceto show that these restrictions are reasonably necessary to protect a legitimate business interest?
Element 3:Defendant breached the restrictive covenant by violating the time, geography, or line of business restriction(s).
What will the plaintiffassertthat Joseph did that was a violation of the Agreement?
--What will the plaintiff assert was a breach of the restriction on time, if any?
--What will the plaintiff say was the breach of the restriction on geography, if any?
--What will the plaintiff say was the breach of the restriction on line of business, if any?
What might the plaintiff offer as evidence to support these assertions?
Fact Scenario
Often, the first thing one does when analyzing a fact situation is to identify the individuals/entities involvedthe "cast of characters"and lay out a timeline of events. Here, the characters and timeline are laid out for you below, followed by a narrative description of the hypothetical situation.
Timeline
2/14/127/30/193/8/203/19/2011/17/202/2/214/23/21
AJ startsAJ promotedAJ resigns.AJ last dayAJ starts GSGS launchesBS files
w/BSw/BSApe-Stronglawsuit
Lawsuit plaintiff:Be-Strong (BS) Lawsuit defendant:Alicia Joseph
Lawsuit claim:breach of a non-compete agreement. New employer:Get-Stronger (GS)
Relevant law:Florida statute on non-compete agreements, Fla. Stat. 542.335
The plaintiff isBe-Strong, a Florida corporation that conducts business in the States of Florida, Georgia, and Alabama by (i) promoting, offering for sale or selling energy drinks and other products to distributors, resellers, consumers, or other actual or potential customers, (ii) soliciting or establishing product distributorships, and/or (iii) soliciting or receiving operating capital from investors.
Alicia Joseph is the defendant. She is a citizen and resident of Broward County, Florida, a former employee of Be-Strong, and a current employee of Get-Stronger.
Get-Stronger is a California corporation that conducts business in the States of California, New Mexico, Arizona, Texas, Louisiana, and Alabama. Get-Stronger's business involves (i) promoting, offering for sale or selling energy drinks and other products to distributors, resellers, consumers, or other actual or potential customers, (ii) soliciting or establishing product distributorships, and/or (iii) soliciting or receiving operating capital from investors.
Since its founding in the 1990s, Be-Strong has manufactured and sold products in sports nutrition, dietary supplement, and beverage industries. Through intensive product development and promotion efforts, Be-Strong has carved out a substantial market presence with its products, including its well-known Boom energy drink product. Boom is a calorie-free, sugar-free performance energy drink, and Boom is Be-Strong's most successful product. Be-Strong competes with other well-known energy drink companies, such as Red Bull, Rock Star, and Monster Energy. Be-Strong's record with its Boom energy drink is recorded in each year's annual report.
Joseph began working with Be-Strong on February 14, 2012. She was hired as a sales agent, having worked before with the Coca Cola company on a team responsible for introducing new diet colas and calorie free energy drinks. Joseph was responsible for promoting the Boom energy drink with new clients, as the company expanded from its Florida base to other parts of the Southeast U.S. region. Her duties were outlined in a job description that describes her tasks generally; that job description does not list specific clients or activities she carried out in the course of her employment.
On July 30, 2019, Be-Strong promoted Joseph to be its Vice President of Sales and Distribution. Joseph's duties, as outlined in her new job description, included supervising the sales team that made arrangements for sale of Be-Strong's products in grocery stores, convenience stores, vending machines, kiosks at fairs and festivals, on cruise ships, at sports arenas, and in other key outlets. Joseph, like other key management employees, was responsible for providing detailed monthly reports to her supervisor, Be-Strong's Executive Vice President of Sales, Julio Diaz.
When she was hired, Joseph entered into the restrictive covenant agreement ("Agreement"). This Agreement includes, among other provisions, a non-compete covenant.
Joseph reported directly to Be-Strong's Executive Vice President of Sales, Julio Diaz, and worked closely with Be-Strong's Chief Executive Officer. Joseph worked out of Be-Strong's base facility in Broward County, Florida. Joseph attended at least some weekly operational meetings with other high-level employees of the Company, where issues including change implementation, production planning, and new product planning may have been discussed. Executive Vice President Diaz sometimes introduced analytical data from a company-specific Vital Information Processing ("VIP") system that outlined Be-Strong's performance metrics with customers.
Joseph submitted a resignation letter on March 8, 2020, and her last day was March 19, 2020.
Get-Stronger is a relatively new company. In 2018, Get-Stronger began working to develop Ape-Strong, a cannabidiol-infused (CBD-infused) drink. Get-Stronger publicly announced its launch of an energy drink product called "Ape-Strong Hemp Energy Drink." The announcement was made on its webpage and in a Super Bowl advertisement on Feb. 2, 2021. Get-Stronger's announcement says that "Ape-Strong Hemp Energy Drink" will have you climbing the walls. Go Ape-sh&t and leave those tired Boom-ers behind!"
Get-Stronger hired Joseph as its Chief Community Outreach Officer (CCOO) on Nov. 17, 2020. As the job description for CCOO states, Joseph has responsibility for overseeing press relations, preparing informational materials to help attract investors, and arranging for the company's participation as a sponsor of charity races, athletic events, and other activities to build a positive image in the community. Joseph participates in high-level planning meetings at Get-Stronger, which are supervised by CEO Sam LaFortune and recorded by Get-Stronger's audiovisual specialist. At each meeting, managers present reports on activities, review company metrics, and assist in overall planning and strategy review.
The non-compete covenant Joseph signed when working with Be-Strong states:
- Activity Restrictions.Employee understands that the industries in which the Company does business are extremely competitive in all ways, from product formulae, to manufacturing, marketing and distribution, and protection of Intellectual Property. Accordingly, to ensure the protection of, among other things the Company's Confidential Information, Intellectual Property, and trade secrets, and the Company's interest in maintaining customer relationships, other business relationships, and a stable workforce, Employee agrees as follows:
- During the term of the Employee's employment with the Company and for a period of one (1) year from the Employee's termination or cessation date with the Company, Employee will not directly or indirectly engage in or affiliate with a Competing Company in any geographic area or in any capacity where the Employee's duties are similar to any of the duties Employee held at any time during his or her employment with the Company or in which the Employee's use of the Company's Confidential Information would be useful to the competitor and/or detrimental to the Company, its owners, directors, officers, employees, and/or its customers. "Competing Company" shall mean any person, company, or other entity working or otherwise engaged in any aspect of the (i) nutritional and dietary supplement industry; (ii) non-alcoholic beverage industry, and/or (iii) sports nutrition industry that competes with the Company or that may compete with the Company based upon the Company's and/or the Competing Company's plans for future business endeavors.
The Agreement states that the non-compete provision is "necessary for the protection of the business and the goodwill of the Company and are considered by Employee to be reasonable for such purposes."
On April 23, 2021, Be-Strong initiated this claim against Joseph and Get-Stronger, alleging breach of the Agreement.
Excerpts from Fla. Stat542.335Valid restraints of trade or commerce.
(1)Notwithstanding s.542.18(Links to an external site.)and subsection (2), enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business, is not prohibited. In any action concerning enforcement of a restrictive covenant:
(a)A court shall not enforce a restrictive covenant unless it isset forth in a writing signed by the personagainst whom enforcement is sought.
(b)The person seeking enforcement of a restrictive covenant shall plead and prove the existence of one or more legitimate business interests justifying the restrictive covenant. The term"legitimate business interest"includes, but is not limited to:
1.Trade secrets, as defined in s.688.002(Links to an external site.)(4).
2.Valuable confidential business or professional information that otherwise does not qualify as trade secrets.
3.Substantial relationships with specific prospective or existing customers, patients, or clients.
4.Customer, patient, or client goodwill associated with:
a.An ongoing business or professional practice, by way of trade name, trademark, service mark, or "trade dress";
b.A specific geographic location; or
c.A specific marketing or trade area.
5.Extraordinary or specialized training.
Any restrictive covenant not supported by a legitimate business interest is unlawful and is void and unenforceable.
(c)A person seeking enforcement of a restrictive covenant also shall plead and prove that the contractually specified restraint is reasonably necessary to protect the legitimate business interest or interests justifying the restriction.
If a person seeking enforcement of the restrictive covenant establishes prima facie that the restraint is reasonably necessary, the person opposing enforcement has the burden of establishing that the contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the established legitimate business interest or interests.[
If a contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect the legitimate business interest or interests, a court shall modify the restraint and grant only the relief reasonably necessary to protect such interest or interests.
(d)In determining the reasonableness in time of a postterm restrictive covenant not predicated upon the protection of trade secrets, a court shall apply the following rebuttable presumptions:
. . . a court shall presume reasonable in time any restraint 6 months or less in duration and shall presume unreasonable in time any restraint more than 2 years in duration. . . .
(h)A court shall construe a restrictive covenant in favor of providing reasonable protection to all legitimate business interests established by the person seeking enforcement. . . .
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