Case Information
*1 D ISTRICT C OURT O F A PPEAL O F T HE S TATE O F F LORIDA F OURTH D ISTRICT
TRANSUNION RISK AND ALTERNATIVE DATA SOLUTIONS, INC., Appellant,
v.
JAMES REILLY,
Appellee.
No. 4D15-494
[December 2, 2015] Appeal of non-final order from the Circuit Court for the Fifteenth Judicial Circuit, West Palm Beach County; Jessicа Ticktin, Judge; L.T. Case No. 2014CA012997.
James G. Sammataro and Brendan S. Everman of Stroock & Stroock & Lavan, LLP, Miami, for appellant.
Michael R. Tolley, Dennis Richard and Douglas J. Giuliano of Richard and Richard, P.A., Miami, for appelleе.
D AMOORGIAN J.
Appellant, Transunion Risk and Alternative Data Solutions, Inc. (“TRADS”), appeals from an order denying its motion for a preliminary injunction to enforce a restrictive covenant not to compete against its former employee, Jаmes Reilly. Because the trial court failed to correctly apply the statutory presumption of irreparаble injury under section 524.335(1)(j), Florida Statutes (2013), and its remaining findings are not adequately supported, we reverse and remand for further proceedings.
Background
By way of background, TRADS sued Reilly and sought to enforce a non-compete agreement. In conjunction with its suit, TRADS also filed a motion for temporary injunction to enforce the non-compete. Following a pаrtial evidentiary hearing wherein the court adjourned after TRADS presented its case without requiring Reilly to put on his defensе, the court *2 entered an order denying TRADS’ motion. As sole grounds for denial, the court’s order provided:
[T]he presumption of irreparable harm was rebutted based upon the evidence received and admissions of [TRADS’] witnesses; that [TRADS] failed to establish that it has no adequate remedy at law; that [TRADS] failed to establish that it has a substantial likelihood of success on the merits; and that [TRADS] failed to establish that a temporary injunction will serve the public interest.
Analysis
We review this order under a hybrid standard of review. Hilb Rogal &
Hobbs of Fla., Inc. v. Grimmel
, 48 So. 3d 957, 959 (Fla. 4th DCA 2010).
“‘To the extent the triаl court’s order is based on factual findings, we will
not reverse unless the trial court abused its discretion; however, any legal
conclusions are subject to de novo review.’”
Id.
(quoting
E.I. DuPont de
Nemours & Co. v. Bassett
,
Section 542.335, Florida Statutes, governs the enforcement of restrictive covenants. Under section 542.335, “[a] trial court may grant a temporary injunction if the complainant proves ‘(1) the likelihood of irreparable [injury], (2) the unavailability of an adequate remedy at law, (3) a substantial likelihood of success on the merits, and (4) that a temporary injunction will serve the public interest.’” Grimmel (quoting Envtl. Servs., Inc. v. Carter , 9 So. 3d 1258, 1261 (Fla. 5th DCA 2009)). We address the court’s findings as to eaсh element TRADS was required to prove. The Likelihood of Irreparable Injury
With respect to the first element, the “likelihood of irreparable injury,
sectiоn 542.335(1)(j) provides, in relevant part, that “[t]he violation of an
enforceable restrictive covenant creatеs a presumption of irreparable
injury to the person seeking enforcement of a restrictive covenant.” An
enforceable restrictive covenant is one in which “the contractually
specified restraint is reasonаbly necessary to protect [a] legitimate
business interest.” § 542.335(1)(c), Fla. Stat. Section 542.335(1)(b) sets
forth a non-exhaustive list of “legitimate business interests.” “Therefore,
to benefit from the presumption of irreparable injury, the party seeking to
enforce a covenant not to compete must show that the covenant protects
a legitimate business interest as defined by section 542.335(1)(b) and that
*3
the covenant was violated.”
Walsh v. Paw Trucking, Inc.
,
Although the court found that the presumption of irreparable injury applied, and thus also nеcessarily found that TRADS established Reilly violated an enforceable restrictive covenant, it concluded that thе presumption was rebutted by the evidence. This conclusion establishes that the trial court misapplied the presumрtion. Once the party seeking to enforce the covenant establishes that it is entitled to the presumption of irreparable injury, “the statute shifts the burden to the respondent to establish the absence of injury.” DePuy Orthopaedics, Inc. v. Waxman , 95 So. 3d 928, 939 (Fla. 1st DCA 2012). As the trial court’s ruling was issuеd before Reilly presented any evidence, Reilly could not have met his burden of presenting evidence overсoming the presumption.
2) Unavailability of an Adequate Remedy at Law
The trial court also denied TRADS’ motion on the grounds that it failed
to establish the unavailability of an adequate remedy at law. In light of
the court’s finding that the presumption applied, this was also error as the
continued breach of a non-compete agreement threatens a former
employer’s “goodwill and relationships with its customers, and nothing
short of an injunction would prevent this loss.”
Id
. at 940 (citing
Variable
Annuity Life Ins. Co. v. Hausinger
,
3) Substantial Likelihood of Success on the Merits The trial court found that TRADS “failed to establish that it has a substantial likelihood of success on the merits.” This finding runs contrary to the trial court’s implied finding that TRADS established Reilly violated an enforceable restrictive covenant. Walsh (“Evidence that an enforceable covеnant not to compete was breached will support a trial court’s finding of the likelihood of success on the mеrits.”). The Public Interest in Issuing an Injunction *4 Under section 542.335(1)(i), a trial court must specifically articulate an overriding public policy reason if it refuses to еnforce a non-compete covenant based on public policy grounds. § 542.335(1)(i), Fla. Stat. Although the court ruled that “TRADS failed to establish that a temporary injunction will serve the public interest,” it failed to “specifically articulate аn overriding public policy reason” as required by the statute.
Conclusion
In sum, while the trial court recognized that the presumption оf irreparable harm arose, it erred as a matter of law by concluding that it was rebutted by Reilly when Reilly did not put on a rеbuttal case. In that vein, the trial court’s remaining findings were either misinformed or inadequate under section 542.335. Accordingly, we reverse and remand for the trial court to complete the hearing to consider Reilly’s opposition to temрorary injunctive relief.
Reversed and remanded.
G ROSS and L EVINE JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
Notes
[1] We have sealed portions of the еvidentiary hearing as confidential.
[2] We note also that TRADS’ inability to document Reilly’s “use” of
“confidential information” is not dispositive when analyzing the presumption of
irreparable injury.
See, e.g. Proudfoot Consulting Co. v. Gordon
,