Steve Norton, an individual, Husk etc. v. American Led Technology, Inc., a Florida etc.

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
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No. 1D17-4113
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STEVE NORTON, an individual,
HUSK SIGNS, INC., an Indiana
corporation, and HUSK
COMPANIES, INC., an Indiana
corporation,
Appellants,
v.
AMERICAN LED TECHNOLOGY,
INC., a Florida corporation,
Appellee.
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On appeal from the Circuit Court for Okaloosa County.
John T. Brown, Judge.
April 30, 2018
PER CURIAM.
American LED Technology, Inc. (“American”) brought suit
against former employee Steve Norton, Husk Signs, Inc., and
Husk Companies, Inc., making a number of allegations
concerning Norton’s departure from American. American moved
for a temporary injunction against Norton based on two grounds:
1) violation of chapter 688, Florida Statutes (the “Uniform Trade
Secrets Act” or “UTSA”) and 2) violation of a valid non-compete
agreement. Following a hearing, the trial court entered an order
granting American’s motion based on UTSA, noting that its
findings were “separate and independent from any breach of
contract claim” and omitting any other reference to the non-
compete agreement. The temporary injunction imposed certain
requirements as to the trade secrets then under Norton’s control
and prohibited Norton from competing with American. We affirm
the entry of a temporary injunction without further comment, but
reverse the portion of the order enjoining Norton from competing
in the industry, as UTSA does not authorize such relief.
UTSA requires courts to take reasonable steps to preserve
the secrecy of trade secrets. § 688.006, Fla. Stat. These steps can
include injunctive relief due to actual or threatened
misappropriation, and even compelling parties to perform
affirmative acts. § 688.003, Fla. Stat. But UTSA may not be used
as a vehicle to restrict competition. See Hatfield v. AutoNation,
Inc., 939 So. 2d 155, 157 (Fla. 4th DCA 2006) (“The statute deals
not with restrictive covenants and employment by a business’
competition, but with misappropriation.”).
In East v. Aqua Gaming, Inc., 805 So. 2d 932, 935 (Fla. 2d
DCA 2001), the trial court granted injunctive relief, prohibiting
the defendant from using confidential information he improperly
obtained and from competing with the plaintiff within the
plaintiff’s operating territory. The Second District Court of
Appeal noted that the latter restriction went “beyond enjoining
the use of misappropriated trade secrets” and held that, absent a
valid non-compete agreement, the defendant “is free to engage in
a competing business.” Id.American contends that Hatfield, 939 So. 2d at 155,
demonstrates that courts do have discretion to restrain
competition when granting injunctive relief under UTSA. In
Hatfield, the Fourth District Court of Appeal affirmed an order
granting a temporary injunction that “included a brief respite
from employment as part of the court’s fashioning a remedy that
would aid [the plaintiff] in minimizing the potential damage by
disclosure of time sensitive trade secrets.” Id. at 157-58.
Here, the trial court’s order prohibited Norton from engaging
“in any business in direct competition with American” for the
earlier of one year or the conclusion of litigation and contained no
geographical limitations on this prohibition. We do not find one
2
year to be a “brief respite,” like the time period in Hatfield.
Further, there was no argument, and we see no evidence, that
any trade secrets here are particularly time sensitive. In sum,
American may not prohibit Norton from direct competition
through the UTSA, and we reverse this portion of the order.
AFFIRMED in part, REVERSED in part and REMANDED.
RAY, BILBREY, and WINOKUR, JJ., concur.
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Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
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Colleen Coffield Sachs, Robert Lee Kauffman, and Michael J.
Henry of Dunlap & Shipman, P.A., Santa Rosa, for Appellants.
A. Benjamin Gordon and Darian Zamora of Keefe, Anchors &
Gordon, P.A., Fort Walton Beach, for Appellee.
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