Florida Court Overturns Injunction: Finds Agreement Had Expired

Posted: Monday, January 05, 2009

By: David M. Kight

Topic: Non-Compete Cases

The Florida Court of Appeals overturned an injunction against a former employee holding that his non-compete agreement had expired before any competitive behavior.  Zupnik, et al. v. All Florida Paper, Inc., No. 3D08-1371, Fl. App. (December 31, 2008).

In this case, Zupnik, had been hired by All Florida as a sales representative. He signed a non-compete agreement for a two year term.  After the two year term, Zupnik remained employed by All Florida for two additional years.  He then formed a new company and began competing as a sub-contract to a competitor, Dade Paper.  The employer sued Dade Paper alleging tort claims based on the violation of Zupnik's agreement.  The trial court granted a injunction preventing Zupnik from working with Dade Paper.  Zupnik and Dade Paper appealed.

The Court of Appeals began its analysis with the discussion of a prior Florida case, Sanz v. R.T. Aerospace Corp., 650 So. 2d 1057 (Fla. App. 1995).  In that case, the Florida Court of Appeals had held that a post-employment covenant that has a specific term expires at the conclusion of that term even if the employee works beyond the term for the employer.  In this case, the Court of Appeals held that Zupnik's continuation of employment beyond the initial two year term in the agreement did not create a new employment agreement.  Because the agreement's own terms limited the agreement to two years, the agreement had expired by the time Zupnik began to compete.  As a result, the court ruled, the injunction was reversed.

NOTE:  Having an agreement which does not extend through an employee's term of employment is highly risky and could lead to you having no opportunity to stop competing behavior.