Monday, January 5, 2009

Florida Court Holds Non-Compete Clause Cannot Survive Expired Employment Agreement (Zupnik v. All Florida Paper)

The second case of the year is just like the first, although this non-compete dispute concerned an employment agreement, rather than a sale-of-business transaction.

In Zupnik v. All Florida Paper, the defendant employee signed a two-year employment agreement to work as a sales representative for a janitorial products company. His non-competition clause provided he would not compete against All Florida "during the Employment Term and within twelve (12) months from the termination of said term...." At the end of the two-year term, Zupnik retained an option to remain at All Florida as an at-will employee, which he exercised properly. However, he signed no new non-compete agreement once he became an at-will employee.

More than two years later, Zupnik quit and formed his own paper products distribution company. All Florida sued on the non-compete and prevailed in the trial court. The Court of Appeal of Florida, however, reversed and held that the non-competition covenant lapsed once the two-year employment agreement ended.

All Florida easily could have avoided this problem with a properly drafted contract. Since it was well-aware Zupnik controlled his ability to remain an at-will employee, the non-compete agreement would have remained in effect indefinitely had the operative triggering language been expanded to include termination of his employment either at the end of his two-year term agreement or as an at-will employee.


Court: Court of Appeal of Florida, Third District
Opinion Date: 12/31/08
Cite: Zupnik v. All Florida Paper, Inc., 997 So. 2d (Fla. Ct. App. 2008)
Favors: Employee
Law: Florida

No comments:

Post a Comment