# Proudfoot Consulting Co. v. Gordon

> Court of Appeals for the Eleventh Circuit · July 30, 2009 · 576 F.3d 1223

URL: https://www.frixlaw.com/law-library/cases/78411

## Case

- **Full name:** PROUDFOOT CONSULTING COMPANY, a Delaware Corporation, Plaintiff-Appellee, v. Derrick GORDON, Defendant-Appellant
- **Court:** Court of Appeals for the Eleventh Circuit
- **Decided:** July 30, 2009
- **Citations:** 576 F.3d 1223; 29 I.E.R. Cas. (BNA) 806; 2009 U.S. App. LEXIS 17057; 2009 WL 2256016
- **Precedential status:** Published
- **Opinion:** Opinion by Trager
- **Judges:** Barkett, Fay, Trager
- **Cited by:** 87 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/78411

## How later opinions describe it (automated extraction)

- stating that, under Florida law, “uncertainty as to the precise amount of the lost profits will not defeat recovery so long as there is a reasonable yardstick by which to estimate the damages”
- stating that a combination of injunctive relief and damages, where injunction prevents future harm and damages compensate for the past, is the most common combination of remedies
- holding that this presumption isrebuttable by the defendant
- finding international restriction reasonable given testimony that company had clients all over the US and Canada and marketed itself throughout both countries

## Opinion text

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JULY 30, 2009
No. 08-14075
________________________ THOMAS K. KAHN
CLERK

D.C. Docket No. 06-80959-CV-LRJ

PROUDFOOT CONSULTING COMPANY,
a Delaware corporation,

Plaintiff-Appellee,

versus

DERRICK GORDON,

Defendant-Appellant,

________________________

Appeal from the United States District Court
for the Southern District of Florida
_________________________
(July 30, 2009)
Before BARKETT and FAY, Circuit Judges, and TRAGER,* District Judge.

TRAGER, District Judge:

This case arises out of an employment agreement (“Agreement”) between

appellant Derrick Gordon ("Gordon" or "appellant") and appellee Proudfoot

Consulting Company ("Proudfoot" or "Proudfoot North America" or "appellee")

that contains a number of restrictive covenants. The Agreement prevents Gordon,

for six months after his employment with Proudfoot ends, from working for a

direct competitor or client of Proudfoot, contacting Proudfoot's clients and

soliciting Proudfoot's employees. The Agreement also bars Gordon from using or

disclosing Proudfoot's confidential information and from retaining Proudfoot

materials after his employment ends. After Gordon left Proudfoot in June 2006 to

work for the Highland Group ("Highland"), a direct competitor, Proudfoot brought

suit to enforce the restrictive covenants.

Following a bench trial, the district court held that all of those restrictions

("Restrictive Covenants") were enforceable under Florida law. Based on Gordon's

breaches of the Restrictive Covenants, the district court concluded that Proudfoot

was entitled to a statutory presumption of irreparable harm. Because Gordon

*
Honorable David G. Trager, United States District Judge for the Eastern District of New
York, sitting by designation.

2
failed to rebut that presumption, the district court entered an injunction against

Gordon, preventing him, for six months, from working for Highland and from

soliciting Proudfoot's clients and employees. Since the district court's decision

was handed down over a year-and-a-half after Gordon began working at Highland,

in order to grant this injunctive relief, the district court had to rely on a tolling

provision in the Agreement, which provides that the six-month restrictive period is

to be tolled during any period where Gordon is in breach of the non-compete and

non-solicitation covenants. The district court found that Gordon's continuous

work for Highland, which breached the Agreement's bar against employment with

a direct competitor, justified tolling the six-month restrictive period. In addition to

granting injunctive relief, the district court also awarded Proudfoot attorney's fees

and $1,659,000 in damages stemming from a project performed by Highland for

Bombardier, a Proudfoot client that Gordon both worked on and helped solicit for

Highland.

On appeal, Gordon seeks to reverse the damages award. In addition, although

Gordon has not appealed the attorney's fees award, he challenges the validity of

the injunction, which has expired, in the hope of revisiting the attorney's fees

award before the district court if the injunction is invalidated. For the reasons

explained below, we conclude that the injunction was not improper. However, we

3
reverse the damages award. Proudfoot failed to establish that Gordon's solicitation

of Bombardier for Highland resulted in Proudfoot's loss of the project that was the

basis of the damages award.

I. BACKGROUND

(1)

Proudfoot North America is a management consulting firm that provides

consulting services to improve clients' work processes by eliminating

redundancies, streamlining processes and implementing systems of management.

Proudfoot North America, which is headquartered in West Palm Beach, Florida

and has offices in Atlanta and New York, operates and markets its services in the

United States and Canada and has clients located in both countries. Management

Consulting Group ("Proudfoot Global"), a publicly-traded company based in the

United Kingdom, is the parent company of a number of Proudfoot affiliates across

the globe, including an affiliate in Europe ("Proudfoot Europe") as well as

Proudfoot North America.

Gordon worked at Proudfoot North America from March 1999 through May

2006. From March 1999 though October 2001, Gordon was a Senior Process

Consultant. Process Consultants, who are supervised by a Project Manager, work

directly with a client's first- and second-level supervisors. From October 2001

4
through January 2005, Gordon was a Project Manager. As a Project Manager,

Gordon had overall responsibility for a specific client project and supervised five

to ten Process Consultants. Project Managers are responsible for achieving results

for a client, obtaining repeat business from a client and convincing a client to

provide referrals and to serve as a reference.

From January 2005 through May 2006, Gordon worked as a Project Director.

As a Project Director, he supervised two to four Project Managers at a time and

was responsible for multiple client projects. A Project Director is responsible for

managing client relationships and is the most senior Proudfoot employee who

interacts with individual clients on an ongoing basis. Project Directors report to

the Vice President of Business Delivery.

On April 18, 2006, Gordon was offered a position by Highland, an operational

management consulting firm that competes directly with Proudfoot. After Gordon

tendered his resignation from Proudfoot on May 1, 2006, Proudfoot CEO Luiz

Carvalho ("Carvalho") met with Gordon. At this meeting, Gordon lied to

Carvalho about the offer that he had received, stating that the offer was from a

private equity firm and never mentioning Highland. After Carvalho offered

Gordon the position of Vice President of Business Delivery for Proudfoot Europe,

Gordon accepted that position and withdrew his resignation. Vice President of

5
Business Delivery is a critical position that has ultimate responsibility for all

aspects of delivering services to clients and for defining strategy for each client

account. While in this position, Gordon's office was located in London.

On June 12, 2006, Gordon again notified Proudfoot that he was resigning. This

time he did not withdraw his resignation, which was voluntary and became

effective on June 23, 2006. Gordon never informed Proudfoot that he was leaving

to work for Highland.

During his tenure at Proudfoot North America, Gordon worked on many

client projects in the United States and on a client project in Mexico. The district

court found that Gordon traveled to a Proudfoot client project in Canada.1 The

district court also found that during Gordon's tenure at Proudfoot North America,

his "territory" included the United States and Canada.2

At Proudfoot, Gordon had access to, and received, information in various forms

about specific Proudfoot clients and projects, as well as about Proudfoot's

1
Gordon argues that this trip, which occurred in 1999, was part of his orientation and that
he did not do any work on that project.
2
Although Gordon maintains on appeal that his territory did not include Canada, at trial,
he was impeached with a deposition answer where he admitted that prior to being transferred to
Europe, he "covered a territory that included the United States, Canada and Mexico." At trial,
Gordon tried to explain that this only meant that he worked for Proudfoot North America, whose
territory encompassed those countries. It should, however, be noted that Gordon stated during
trial that at Proudfoot, "we would have meetings on a weekly basis where we would literally go
through and discuss every project within North America, and I was aware of all the projects . . . ."

6
operations generally. Gordon received hard copies of a number of Proudfoot

materials, including training manuals and videos from the numerous training

sessions he attended, a list of Proudfoot Europe's employees, business cards of

Proudfoot clients for whom he had worked, and a Proudfoot employee newsletter.

Gordon retained these materials after leaving Proudfoot, but insisted that he did so

unintentionally.

While at Proudfoot, Gordon also had access to information beyond the specific

hard-copy materials that he retained. He had access to information about

Proudfoot's clients, including pricing information.3 Moreover, during his tenure as

Vice President of Business Delivery for Proudfoot Europe, Gordon conducted

high-level reviews of the company's client projects in Europe and received

information about those projects. In addition, Gordon also had access to

information about Proudfoot's operations. At trial, he admitted, generally, that he

had "access to confidential information about Proudfoot's business." Moreover,

the district court concluded that Gordon was exposed to Proudfoot's "methodology

3
It is somewhat unclear from Gordon's trial testimony whether the pricing information
that he had access to was relevant only to specific clients or whether this information had broader
relevance to any potential client that Proudfoot might seek to obtain. Carvalho, however,
testified that Proudfoot employees have access to "pricing mechanisms," which would appear to
be generally applicable.

7
for [providing] operational management consulting services" as well as to

Proudfoot's "products and offerings and tools."

In addition, during his tenure at Proudfoot, Gordon accessed and downloaded

information from the Knowledge Management database, a project database that

contains information about all of Proudfoot's client projects, from around the

world, dating back to the 1980s and other information about Proudfoot's business

operations. Tools, studies, questionnaires and diagnostics from past projects are

included in the Knowledge Management database so that Proudfoot employees

can use that information "for other clients in similar situations anywhere around

the world."

On June 26, 2006, Gordon started working at Highland. Highland, whose

headquarters are located in the United States, does business and maintains offices

in North America and Europe. At Highland, Gordon served as a Project Manager

responsible for day-to-day delivery and execution of client projects and the direct

supervision of process consultants. Gordon was promoted to Director of

Operations in June 2007.

At Highland, Gordon worked on projects for different clients; one of those

clients was Bombardier, who was also a client of Proudfoot Europe. In September

2006, Highland assigned Gordon to a project for Bombardier called "Bombardier

8
Interiors." In February 2007, eight months after leaving Proudfoot, Gordon helped

solicit a different Bombardier project for Highland called "Bombardier Logistics."

Gordon was the Project Manager for that project until his promotion in June

2007.4 In addition to his specific client assignments, in the fall of 2006, Gordon

was given the responsibility of training other Highland employees and

coordinating the development of written training materials. Gordon performed

this function for approximately "eight weeks." Also, around the time of trial,

Gordon was put in charge of developing a new model for reviewing the operations

phase of Highland's client projects.

(2)

The Agreement Gordon signed with Proudfoot contains four Restrictive

Covenants. Three of the Restrictive Covenants are found in a "Noncompetition

and Nonsolicitation" clause, which restricts Gordon from engaging in certain

activities for six months after his employment with Proudfoot ends ("six-month

restrictive period"). First, the non-compete provision prevents Gordon from

"[s]erv[ing] as an employee . . . or consultant for . . . any business which is a

Direct Competitor" ("competitor non-compete covenant" or "competitor non-

4
The details of Gordon's work for, and solicitation of, Bombardier are addressed more
fully in the discussion of Gordon's appeal of the damages award.

9
compete clause"). "Direct Competitor" is defined as "any person or entity engaged

in the business of providing professional services to advise clients as to the design

and installation of systems and processes to improve the productivity and

efficiency of their business operations." Second, the non-compete provision also

prevents Gordon from "[s]erv[ing] as an employee . . . or consultant for . . . any

business which is . . . a Client" ("client non-compete covenant" or "client non-

compete clause"). "Client" is defined as "a person or organization, which at any

time within the three years preceding the date of termination of Employee's

employment has received a proposal or bid from [Proudfoot], or has received any

services from [Proudfoot]. . . ." Third, under a non-solicitation provision, Gordon

is prohibited from "contact[ing] any client of [Proudfoot]" or soliciting any

Proudfoot employees ("non-solicitation covenant" or "non-solicitation clause").

The Agreement also provides that the six-month restrictive period "shall be tolled

during any period in which Employee is in violation of this Noncompetition and

Nonsolicitation provision."

In addition, fourth, the Agreement also includes a clause concerning

confidential information ("confidential information clause") that is distinct from

the Noncompetition and Nonsolicitation clause. The confidential information

10
clause defines what constitutes confidential information5 and requires Gordon to

return all Proudfoot documents and materials to the company upon the termination

of his employment. Unlike the six-month time limit of the other three covenants

described above, this clause prevents Gordon from disclosing or using this

information "at all times after the termination of [his] employment."

II. PROCEDURAL HISTORY

On August 23, 2006, Proudfoot filed suit against Gordon in Florida Circuit

Court seeking injunctive relief and alleging breach of contract. Gordon, a citizen

5
The Agreement defines "confidential information" as

(i) Client and prospective client names, needs, structures,
organizations, data profiles, preferences, attitudes, idiosyncracies,
and all other information concerning the business and operations of
clients of the Company;

(ii) All of the Company's applications, operating systems,
techniques, methods, procedures and approaches, including
diagnostic instruments, drawings, designs, graphs, charts, tapes,
diagrams, films, specifications and software;

(iii) The Company's fee structures, and procedures and
arrangements and all financial information pertaining to the
Company;

(iv) Inventions, and research and development activities of the
Company; and

(v) All other materials and information concerning the Company's
business and its conduct which the Company treats as proprietary
and confidential which is not generally known to others.

11
of Georgia, removed the case to the United States District Court for the Southern

District of Florida on the basis of diversity jurisdiction. Pursuant to the consent of

the parties, the case was tried in January 2008 before Magistrate Judge Linnea R.

Johnson ("district court"). After a three-day bench trial, the parties submitted

proposed findings of fact and conclusions of law ("Proposed Findings").

Proudfoot's Proposed Findings offered three alternative damages proposals, which

sought an award based on: (1) Highland's profits for all projects that Gordon

worked on; (2) Highland's profits for the Bombardier project that Gordon helped

solicit; or (3) the total compensation Gordon received while working at Highland.

On April 15, 2008, the district court adopted, with few modifications,

Proudfoot's Proposed Findings and Proudfoot's second damages proposal. That

same day, the district court entered a final judgment awarding Proudfoot

$1,659,000 in damages and enjoining Gordon, for six months, from: (1) working

in North America or Europe for Highland or any other direct competitor;

(2) contacting any client of Proudfoot; and (3) soliciting any Proudfoot employees.

Gordon was also enjoined from possessing, using or disclosing any confidential

information of Proudfoot and was directed to return any such information in his

possession to Proudfoot. The portion of the injunction preventing Gordon from

using or disclosing Proudfoot's confidential information did not include a time

12
limitation. On appeal, Gordon challenges the district court's grant of the

injunction and the damages award.

After Gordon filed a notice of appeal, the district court entered a separate

judgment against Gordon, awarding Proudfoot $335,050.55 in attorneys' fees and

costs under Fla. Stat. § 542.335(1)(k). No notice of appeal was filed from this

award.

III. DISCUSSION

A. Standard Of Review

After a bench trial, we review the district court's conclusions of law de novo

and the district court's factual findings for clear error. Renteria-Marin v. Ag-Mart

Produce, Inc., 537 F.3d 1321, 1324 (11th Cir. 2008). "A factual finding is clearly

erroneous ‘when although there is evidence to support it, the reviewing court on

the entire evidence is left with the definite and firm conviction that a mistake has

been committed.'" Morrissette-Brown v. Mobile Infirmary Med. Ctr., 506 F.3d

1317, 1319 (11th Cir. 2007) (quoting Anderson v. City of Bessemer City, 470 U.S.

564, 573, (1985)). "The clear error standard does not change when the district

court adopts verbatim the findings of one of the parties, but the practice is strongly

disapproved." Lykes Bros., Inc. v. U.S. Army Corps of Eng'rs, 64 F.3d 630, 634

n.4 (11th Cir. 1995).

13
B. Enforceability And Breach Of The Restrictive Covenants

1. The Relevant Law – Fla. Stat. § 542.335

In 1996, Florida adopted Fla. Stat. § 542.335, which "contains a comprehensive

framework for analyzing, evaluating and enforcing restrictive covenants contained

in employment contracts." Envtl. Servs., Inc. v. Carter, 9 So.3d 1258, 1262 (Fla.

Dist. Ct. App. 2009). For a restrictive covenant to be valid, "[t]he person seeking

enforcement of [the] restrictive covenant shall plead and prove the existence of

one or more legitimate business interests justifying the restrictive covenant." Fla.

Stat. § 542.335(1)(b). Section (1)(b) of the statute enumerates a non-exhaustive

list of "legitimate business interest[s]." Among these are: (1) "[v]aluable

confidential business or professional information that otherwise does not qualify

as trade secrets"; (2) "[s]ubstantial relationships with specific prospective or

existing customers, patients, or clients"; and (3) "[e]xtraordinary or specialized

training."

In addition, to be enforceable, restrictive covenants must be reasonable with

regard to time, area and line of business. Fla. Stat. § 542.335(1). Once an

employer establishes a prima facie case that the contractually specified restraint is

"reasonably necessary to protect the legitimate business interest[s] . . . justifying

the restriction," the burden of proof shifts to the employee to show that "the

14
contractually specified restraint is overbroad, overlong, or otherwise not

reasonably necessary to protect the established legitimate business interest[s]."

Fla. Stat. § 542.335(1)(c). If the court finds that the "contractually specified

restraint is overbroad, overlong, or otherwise not reasonably necessary to protect

the legitimate business interest[s]," the court is required to "modify the restraint

and grant only the relief reasonably necessary to protect such interest or interests."

Id.

"The violation of an enforceable restrictive covenant creates a presumption of

irreparable injury to the person seeking enforcement of a restrictive covenant."

Fla. Stat. § 542.335(1)(j). This presumption, however, is rebuttable. JonJuan

Salon, Inc. v. Acosta, 922 So. 2d 1081, 1084 (Fla. Dist. Ct. App. 2006).

2. The District Court's Decision

The district court found that Proudfoot established three legitimate business

interests, a prerequisite under the statute for any form of relief. These interests

are: (1) Gordon's receipt of the information outlined earlier, which the district

court found was valuable and confidential; (2) Proudfoot's substantial

relationships with specific prospective and existing customers; and (3) the

extraordinary and specialized training provided to Gordon.

15
After finding that those interests justified the Restrictive Covenants, the district

court had to determine whether the geographic scope of the competitor

non-compete covenant was overbroad or otherwise not reasonably necessary to

protect Proudfoot's legitimate business interests.6 At the outset, the district court

found that the Agreement provided "in plain fashion, that the covered area is

North America and any other territory to which Gordon is assigned during his

employment." That finding was erroneous as the competitor non-compete clause

in the Agreement contains no such explicit geographic limitation. However,

Gordon concedes that because the competitor non-compete covenant did not

include a geographic limitation, it was permissible for the district court to supply a

reasonable geographic scope. Here, the district court found that, even if the

Agreement were silent, North America and Europe would be a reasonable

geographic area because Proudfoot conducts its operations in that territory and

Gordon was assigned to that territory.

Once the district court determined that the Restrictive Covenants were

enforceable and defined the geographic scope of the competitor non-compete

clause, the district court concluded that Gordon breached all four Restrictive

6
The district court never discussed a geographic limitation for the covenants that restrict
Gordon from contacting or working for Proudfoot clients.

16
Covenants. The district court found that Gordon's employment by Highland

breached the competitor non-compete covenant. The district court also found that

Gordon's solicitation of Bombardier and his work on projects for Bombardier

violated both the non-solicitation clause and the client non-compete covenant.

Finally, the district court determined that Gordon's retention of Proudfoot

materials after his employment ended breached the confidential information

clause, which required Gordon to return these materials to Proudfoot. Based on

these breaches, the district court concluded that Proudfoot was entitled, under Fla.

Stat. § 542.335(1)(j) to a presumption of irreparable injury, which the district court

found Gordon failed to rebut.

The district court concluded that Gordon's breach of the competitor

non-compete covenant, based on his employment with Highland, tolled the six-

month restrictive period from the time he began working for Highland in June

2006 through the date of the district court's judgment. The district court used this

violation to toll not only the six-month restrictive period for the competitor

non-compete covenant, but also the six-month restrictive periods for the client

non-compete covenant and the non-solicitation clause.7 This tolling allowed the

7
Although the district court also found that Gordon breached the client non-compete
clause and the non-solicitation covenant by working on a project for Bombardier in September
2006 and by working on, and soliciting, a project for Bombardier in February 2007, the district

17
district court both to grant the injunction and to award Proudfoot damages, which

were based on Gordon's work for, and solicitation of, Bombardier in February

2007 and occurred more than six months after Gordon left Proudfoot.

In attacking the injunction and damages award, Gordon argues that the

competitor non-compete clause should not have been enforced because the

training he received did not rise to the level of a legitimate business interest and

because he did not intentionally retain any confidential Proudfoot materials.

Gordon also contends that, even if the competitor non-compete covenant were

enforceable, his work for Highland in Canada should not have been considered a

violation of that covenant because Canada should not have been included in the

geographic scope of that covenant. Finally, Gordon asserts that even if he

breached the competitor non-compete clause, that breach should have been

disregarded because it was not intentional.

Although we have doubts about some of the district court's factual findings and

legal conclusions, Gordon's arguments ultimately do not persuade us that the

district court erred in concluding that: (1) the confidential information which

Gordon had was a legitimate business interest and justified the competitor non-

court did not explicitly rely on those breaches as a basis for tolling the six-month restrictive
period.

18
compete covenant; (2) Gordon's work for Highland in Canada breached that

covenant; and (3) Gordon's breach could be used to toll the six-month restrictive

period even if that breach was not intentional. Accordingly, the grant of injunctive

relief was not improper.8

3. Enforceability Of The Competitor Non-Compete Covenant

The district court found that all three of Proudfoot's legitimate business

interests – confidential information, training and client relationships – justified

the competitor non-compete clause. Although Gordon argues that Proudfoot

failed to establish a legitimate business interest in his training, it is

8
Except for the portion of the injunction restricting the use or disclosure of Proudfoot's
confidential information, which has no temporal limitation, the remainder of the injunction,
which ran for six months, has long since expired. It is unclear if the attorney's fees award would
prevent Gordon's appeal of the injunctive relief from being moot, particularly as Gordon has not
appealed that award.

Nonetheless, some of the same issues, such as, for example, the enforceability of the
competitor non-compete clause and the tolling of the six-month restrictive period, underlie both
the injunction and the damages award. Therefore, those issues are not moot. See Medtronic, Inc.
v. Janss, 729 F.2d 1395, 1398-99 (11th Cir. 1984) (holding that even though injunction had
expired, issues concerning enforceability and breach of restrictive covenants were not moot
where damages claim, which was bifurcated from trial of injunctive relief, was still pending).

Although the question of whether the district court was correct in enjoining Gordon from
using or disclosing Proudfoot's confidential information for an indefinite period of time is not
moot, Gordon has not challenged that determination on appeal. It should, however, be noted that
similar covenants regarding confidential information have been found to be presumptively
unreasonable under Fla. Stat. § 542.335(1)(d)1 where the restriction has a duration of more than
two years. See Re/Max Intern., Inc. v. Citimaxx Corp., No. 08-cv-2554, 2009 WL 1883035
(M.D. Fla. Jun 30, 2009).

19
unnecessary to address that challenge because Proudfoot was only required to

establish one legitimate business interest to justify the non-compete covenant and

we conclude that the district court did not err in finding this covenant was justified

by, and reasonably necessary to protect, Proudfoot's legitimate business interest in

its confidential information.9

9
We doubt that Proudfoot's interest in Gordon's training could justify the competitor
non-compete clause. Proudfoot did not establish that Gordon's training went "beyond what is
usual, regular, common, or customary" in the consulting industry. Hapney v. Cent. Garage, Inc.,
579 So. 2d 127, 132 (Fla. Dist. Ct. App. 1991), disapproved on other grounds, Gupton v. Village
Key & Saw Shop, Inc., 656 So. 2d 475 (Fla. 1995). In addition, Gordon's training, which appears
to have involved general management, sales and consulting skills, would only seem to be
"specialized" in the sense that it was geared to Proudfoot's own methodologies, practices and
procedures.

We also have doubts whether Proudfoot's interest in its substantial client relationships would
justify the competitor non-compete clause. Proudfoot's legitimate business interest in its client
relationships includes the relationships that Gordon established with Proudfoot clients as well as
the client-specific confidential information known to Gordon. Although the covenants that
prevent Gordon from contacting or working for Proudfoot clients would be reasonably necessary
to prevent Gordon from exploiting any relationships that he developed with Proudfoot clients, we
do not see why the broad competitor non-compete covenant, which bars Gordon from working
for a competitor irrespective of which clients he is serving, would be reasonably necessary to
protect Proudfoot's interest in the relationships that Gordon developed with its clients. See Envtl.
Servs., Inc. v. Carter, 9 So.3d 1258, 1263-64 (Fla. Dist. Ct. App. 2009) (finding that
non-compete agreement that prevented former employee from performing services for customers
of former employer "with whom the Employee had any business-related contact . . . during
his/her employment" was justified by former employer's legitimate business interest in its
substantial relationships with those customers). Moreover, a broad prohibition against work for a
competitor may not be reasonably necessary to protect client-specific confidential information
known to an employee if restrictions that prevent the employee from contacting, or working for,
those clients would be sufficient to protect that information. Gordon, however, has not
contended that his access to confidential information was limited to information that was only
relevant to specific clients.

20
The district court found that, while at Proudfoot, Gordon received information

about Proudfoot's clients and business operations, including training materials,

pricing information, information about Proudfoot's methodology for providing

operational management consulting services and information about Proudfoot's

products, offerings and tools. The district court concluded that this information

constituted "valuable confidential business information" and that "the

confidentiality of that . . . information is at risk so long as [Gordon] is employed

by Proudfoot's direct competitor."10 Citing Autonation v. O'Brien, 347 F. Supp. 2d

1299 (S.D. Fla. 2004), the district court reasoned that "when an employee has

access to confidential business information crucial to the success of an employer's

business, that employer has a strong interest in enforcing a covenant not to

compete."

Gordon does not dispute that he received valuable confidential information

during his tenure at Proudfoot.11 His only argument related to Proudfoot's

10
The district court found that Gordon's "employment by a direct competitor, no matter
in what capacity, necessarily endangers Proudfoot's confidential information." Although this
broad statement suggests that the district court believed that Gordon's position at Highland was
irrelevant, it must be stressed that, prior to making this statement, the district court had
previously found that Gordon was in a position at Highland "that competes" with Proudfoot.
11
The district court's findings regarding the confidentiality and value of the information
that Gordon had access to are somewhat troubling. For example, the district court found, without
further explanation, that Proudfoot's "valuable confidential business information" included the
mere identity of Proudfoot's clients as well as the pricing terms related to the company's projects.

21
confidential information is that he did not intentionally breach the confidentiality

clauses's restriction against the retention of Proudfoot materials because he

unknowingly kept certain Proudfoot materials after leaving Proudfoot and never

used or disclosed those materials while working at Highland.

Gordon mistakenly assumes that Proudfoot's interest in its confidential

information would only have justified the enforcement of the competitor

non-compete covenant if Proudfoot could establish that he breached the

confidential information clause by improperly retaining and using Proudfoot

materials. Gordon, however, ignores the fact that the information that he received

was clearly not limited to the physical materials he retained. Gordon admitted that

he had access to confidential information about Proudfoot's business, including

Such information may not be sufficient to justify a restrictive covenant. See Deloitte & Touche
USA LLP v. Lamela, No. Civ. A. 1542-VCP, 2007 WL 1114075, at *7-8 (Del. Ch. Apr. 6, 2007)
(rejecting, under Fla. Stat. § 542.335, former employer's attempt to apply non-solicitation clause
to certain clients where employee did not have any relationship with those clients and former
employer failed to establish it had any special pricing arrangement with those clients and did not
allege "with any specificity that [the employee] had access to nonpublic pricing information or
strategies of [the former employer] that would give [the employee] an unfair competitive
advantage in dealing with" those clients). The district court's findings illustrate why verbatim
adoption of one party's proposed findings are "strongly disapproved." Lykes Bros., 64 F.3d at
634 n.4. That said, at trial, Gordon admitted that Proudfoot's pricing information and the identity
of Proudfoot's clients were confidential. Moreover, before the district court, Gordon did not
contest that he had access to confidential information while at Proudfoot and instead attempted to
argue that Proudfoot's interest in its confidential information did not justify the Restrictive
Covenants because there was no evidence that he ever used that information or misappropriated
any confidential Proudfoot materials.

22
pricing information. In addition, Gordon was exposed to Proudfoot's methodology

for providing operational management consulting services as well as to

Proudfoot's products, offerings and tools. Although the testimony on these points

could have been more detailed, Gordon does not challenge the district court's

findings on these points and does not contest that he could use this information in

his new position at Highland to compete unfairly against Proudfoot. Even if it is

assumed that Gordon's accidental retention of Proudfoot materials should not be

considered a material breach of the confidential information clause, the district

court's conclusion that Gordon's employment with Highland endangered the

information that he received at Proudfoot (a conclusion that Gordon does not

challenge) provides a basis to enforce the competitor non-compete covenant.12

12
It is unclear under Florida law when confidential information will justify a broad
restriction that prevents an employee from working for a competitor. There are two potentially
conflicting strands of authority on this issue. Under the approach adopted by the district court,
such covenants should be enforced where an employee is in a position at her new employer to use
her former's employer's confidential information. Other authorities suggest a second, slightly
different standard that would enforce such covenants where it is established that disclosure of the
confidential information by the employee would be inevitable in the employee's new position.

In following the first approach, the district court relied on an earlier federal case, Autonation
v. O'Brien, 347 F. Supp. 2d 1299, 1305-08 (S.D. Fla. 2004), which held that the employee's
access to confidential information, which included the former employer's strategic plan, market
analyses, forecasts, sales trends, and best practices, justified a restriction against work for a
competitor where the employee was in a position at his new employer to use that information to
unfairly compete against his former employer. Some Florida state court decisions also appear to
have adopted this approach. See Open Magnetic Imaging, Inc. v. Nieves-Garcia, 826 So. 2d 415,
417, 419 (Fla. Dist. Ct. App. 2002) (per curiam) (holding that physician relations representative's
knowledge of confidential database of physicians, which was created as part of "confidential

23
Moreover, nothing raised by Gordon in his argument regarding the Proudfoot

strategic marketing plan," was a legitimate business interest that justified non-compete clause
where employee was hired by competitor as a marketing representative); Austin v. Mid State Fire
Equip. of Cent. Florida, Inc., 727 So. 2d 1097, 1098 (Fla. Dist. Ct. App. 1999) (holding that
restriction against work for a competitor was not reasonably necessary to protect pricing
information known to the employee because the employee, who worked as a service technician,
"does not set up service runs or set prices; he merely executes the service runs as instructed by
his employer").

A law review article co-authored by the Senate sponsor of Fla. Stat. § 542.335 implies that a
second standard should govern. See John A. Grant & Thomas Steele, Restrictive Covenants:
Florida Returns to the Original "Unfair Competition" Approach to the 21st Century, 70 Fla. B.J.
53, 53-56 (Nov. 1996) (hereinafter "Grant & Steele"). Grant & Steele, which has been cited by
numerous Florida decisions, see, e.g., Univ. of Florida, Bd. of Trustees v. Sanal, 837 So. 2d 512,
516 (Fla. Dist. Ct. App. 2003), suggest that in determining whether an employee's knowledge of
confidential information justifies a restriction against work for a competitor, courts should look
to the definition of threatened misappropriation used in trade secrets law. See Grant & Steele at
54-55, 54 n.15; Fla. Stat. §§ 688.002-688.003. As other jurisdictions have recognized, under
trade secrets law, threatened misappropriation can be enjoined where, based on the details of the
trade secrets at issue and the employee's position at the new employer, disclosure of the trade
secrets would be inevitable. See Pepsico, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995)
(enjoining employee from working for competitor based on inevitable disclosure of trade secrets
even though employee did not enter into non-compete agreement); Payment Alliance Intern., Inc.
v. Ferreira, 530 F. Supp. 2d 477, 482 (S.D.N.Y. 2007) (enforcing restriction against work for a
competitor and noting factors to consider in determining whether there is a risk of inevitable
disclosure). One Florida decision enforced a non-compete agreement based on this theory of
inevitable disclosure. Fountain v. Hudson Cush-N-Foam Corp., 122 So. 2d 232, 234 (Fla. Dist.
Ct. App. 1960) (finding that employee's "knowledge of the trade secrets would be so entwined
with his employment" that "it would seem logical to assume that his employment by a competitor
. . . would eventually result in a disclosure of this information").

Although the principle of inevitable disclosure would appear to impose a higher standard than
the approach set out in O'Brien, it is unclear if, in practice, the application of those two standards
would produce different results. It is, however, unnecessary for us to resolve this uncertain issue
of Florida law because Gordon, whose argument on appeal addresses only the materials he
retained, has not challenged the district court's reliance on O'Brien or the district court's findings
about the other confidential information that he received.

24
materials that he retained undermines that conclusion.13 As such, Gordon has

failed to show that the district court clearly erred in finding that Proudfoot's

confidential information constituted a legitimate business interest that justified the

competitor non-compete covenant.

4. Geographic Scope Of The Competitor Non-Compete Covenant

Gordon asserts that Canada should have been excluded from the geographic

scope of the competitor non-compete covenant and that, if excluded, there would

13
A few matters raised by Gordon are potentially relevant to the issue of whether the
confidential information he received justified enforcement of the competitor non-compete clause.
First, Gordon cites Johnson Controls, Inc. v. Rumore, No. 07-cv-1808, 2008 WL 203575 (M.D.
Fla. Jan 23, 2008). However, Johnson Controls refused to enjoin an employee with confidential
information from working for a competitor because his new position was located outside of the
non-compete covenant's geographic scope. Thus, Johnson Controls is consistent with the
approach taken in O'Brien and is factually distinguishable from the instant case. Second, as
discussed in n.12, even Grant & Steele, on whom Gordon relies, acknowledge that threatened
disclosure of confidential information can justify the enforcement of a restrictive covenant.
Third, to the extent that Gordon suggests that there must be evidence that he intended to use
Proudfoot's confidential information, that argument fails to persuade us that the competitor non-
compete covenant was not enforceable. Both of the approaches outlined in n.12 appear to focus
on objective facts regarding the employee's new position and the confidential information at
issue. See AutoNation v. Maki, No. 03-18896 CACE (03), 2004 WL 1925479, at *5 (Fla. Cir.
Ct. Aug. 25, 2004) (stating that analysis of whether an employee has the ability to use
confidential information to compete unfairly against a former employer is "an objective one"),
aff'd, 895 So. 2d 453 (Fla Dist. Ct. App. 2005) (per curiam); Payment Alliance Intern., 530
F. Supp. 2d at 482 (stating that "even if [defendant employee] acted with the best of intentions,
'he may unintentionally transmit information gained through his association with [his former
employer] during his day to day contact' with his new employer" (quoting Global Telesystems,
Inc. v. KPNQwest, N.V., 151 F. Supp. 2d 478, 482 (S.D.N.Y. 2001))). Even if Gordon's
subjective intent were considered, given the district court's findings regarding Gordon's deception
during his departure from Proudfoot, one could doubt Gordon's willingness to faithfully abide by
the restrictions in the confidential information clause. See Pepsico, 54 F.3d at 1270-71 (holding
that district court did not abuse its discretion in finding that employee's lack of candor regarding
acceptance of new job demonstrated employee's willingness to misuse former employer's trade
secrets).

25
be no breach of the competitor non-compete covenant. In arguing for the

exclusion of Canada, he points out that Proudfoot's complaint limited the

geographic scope of that covenant to the United States and urges that even apart

from the complaint, including Canada was not reasonably necessary to protect

Proudfoot's business interests and, therefore, an exclusion covering Canada should

not be enforceable.

Gordon claims that the inclusion of Canada is critical because he testified that,

during the first six months of his tenure at Highland, he worked exclusively in

Canada. If this conduct were not a breach of the competitor non-compete

covenant, Gordon contends that the six-month restrictive period should not have

been tolled. Because this tolling was necessary to both the grant of the injunction

and the damages award, Gordon urges that both the injunction and the damages

award were not valid.14

14
Proudfoot argues that even if Canada were excluded from the geographic scope of the
competitor non-compete covenant, Gordon's company-wide work for Highland (such as his
training role) would still constitute a breach of the competitor non-compete covenant even if
Gordon was physically located in Canada when he performed that work because it benefitted
Highland in the United States. Given that Gordon had certain company-wide duties, his mere
physical situs may not be dispositive. However, because we conclude that the district court did
not err in including Canada in the geographic scope of the competitor non-compete clause, it is
unnecessary to address this point.

26
a. Geographic Scope Alleged In Proudfoot's Complaint

Gordon argues that Proudfoot should be bound by the allegation in its Verified

Complaint that the geographic scope of the competitor non-compete covenant is

limited to the United States.15 When Gordon raised this issue at trial during an

oral motion for judgment on partial findings, Proudfoot's counsel responded that

the pre-trial stipulation expanded the scope of the territory outlined in the

complaint.16 After denying Gordon's motion, the district court explicitly stated

that the impact of the pre-trial stipulation on the complaint was still an open issue.

However, in his Proposed Findings, Gordon never argued that the allegations in

Proudfoot's complaint conclusively determined that the competitor non-compete

15
If Gordon were to prevail on this argument, both Canada and Europe would have to be
excluded from the geographic scope of the competitor non-compete covenant. It should be noted
that Gordon also argues that the geographic scope of the competitor non-compete clause should
not have included Europe because only Proudfoot Europe operates in Europe and neither
Proudfoot Europe nor Proudfoot Global are parties to this action. Gordon first raised this
argument in a motion under Federal Rules of Civil Procedure 52(b) and 59(e) after the district
court issued its Findings of Fact and Conclusions of Law. This motion also argued that
Proudfoot should not have been able to recover damages based on Gordon's solicitation of
Bombardier because Bombardier was only a client of Proudfoot Europe. The district court,
which interpreted Gordon's motion as raising a standing argument, denied the motion, finding
that: (1) Gordon waived this argument under Rules 52(b) and 59(e); (2) Gordon waived this
argument under Florida substantive law; and (3) Gordon's argument failed on the merits. On
appeal, Gordon contests the latter two rationales, but raises no argument challenging the district
court's finding of waiver under Federal Rules 52(b) and 59(e). As such, we decline to address
Gordon's challenges to the district court's alternative grounds for denying the motion.
16
In the Joint Pre-Trial Stipulation, Proudfoot's "Statement of the Case" asserts that
"Gordon was employed by Proudfoot from 1999 to 2006 and worked primarily in North
America."

27
covenant's geographic scope did not encompass Canada. Moreover, not only did

the evidence at trial include admissions by Gordon that his territory included

Canada and that he attended weekly meetings that discussed every project in North

America, but Gordon has not even argued that the allegation in Proudfoot's

complaint prejudiced him either during discovery or at trial. The trial court was,

therefore, fully justified in relying on the evidence offered rather than on what

clearly appeared to be a mistake in Proudfoot's pleadings.

b. Reasonableness Of The Geographic Scope Of The Competitor Non-
Compete Covenant

"Whether a non-compete covenant is reasonable or overly broad is a question

of fact for the trial court." Whitby v. Infinity Radio Inc., 951 So. 2d 890, 897 (Fla.

Dist. Ct. App. 2007) (holding that trial court erred in granting summary judgment

without conducting an evidentiary hearing to hear and receive evidence regarding

covenant's reasonableness and scope and noting that trial court had previously

assured employee that she would be allowed to present such evidence). As

explained below, the district court did not clearly err in including Canada in the

geographic scope of the competitor non-compete.

As an initial matter, we reject Gordon's argument that Proudfoot failed to show

that it competes in the Canadian market because no evidence was introduced

28
identifying specific Proudfoot clients in Canada. Carvalho, Proudfoot's CEO,

testified that Proudfoot has clients "all over" the United States and Canada, and

markets itself throughout both countries. Aside from the testimony of Carvalho,

Gordon admitted that he: (1) visited one Proudfoot client project in Canada;

(2) "covered a territory that included the United States, Canada and Mexico"; and

(3) attended weekly meetings that discussed Proudfoot's projects in "North

America." Notably, Gordon offered no contrary evidence suggesting that

Proudfoot does not compete in the Canadian market.

With regard to the issue of the appropriate geographic scope, Gordon's sole

argument related to Proudfoot's confidential information is that there was no

evidence that Proudfoot's Knowledge Management database contained any

information about any specific Canadian clients, and that, even if it did, there was

no evidence he accessed any such information. Underlying Gordon's argument is

the assumption that the confidential information he received at Proudfoot is

relevant only to specific clients and to the United States market. However, if a

restriction preventing Gordon from working for a direct competitor anywhere in

the United States was reasonably necessary to protect the confidential information

Gordon received, a point that Gordon does not contest, it is unclear why that

information would not be equally relevant to the Canadian market. Even if

29
Gordon never accessed confidential information about specific Canadian clients17,

Gordon points to no evidence showing that the confidential information he did

receive was only relevant to the United States and could not be used by a

competitor to compete unfairly against Proudfoot in the Canadian market. As

such, we cannot say that the district court clearly erred in including Canada in the

geographic scope of the competitor non-compete covenant. See AutoNation v.

Maki, No. 03-18896 CACE (03), 2004 WL 1925479, at *6, 9 (Fla. Cir. Ct. Aug.

25, 2004) (enjoining former employee from competing within 50 miles of his

former auto dealership and within 10 miles of any other dealerships owned by his

former employer anywhere in the United States where employer established

interests in confidential information and training and former employee failed to

show that geographic area was overbroad), aff'd, 895 So. 2d 453 (Fla. Dist. Ct.

App. 2005) (per curiam); AutoNation v. Hankins, No. 03-14544 CACE (05), 2003

WL 22852206, at *12, 16 (Fla. Cir. Ct. Nov. 24, 2003) (same)18; Autonation, Inc.

17
Although there is no direct evidence that Gordon accessed information about any
Canadian clients through Proudfoot's Knowledge Management database, Gordon admitted
attending weekly meetings that discussed "every project within North America."
18
In both Maki and Hankins, the competitors that the former employees went to work for
were within fifty miles of the employees' former dealership and within ten miles of other
dealerships owned by the former employer. However, the injunctions issued in both those cases
did not simply prevent the former employees from working for those specific competitors, but
covered the broader geographic territory identified above.

30
v. O'Brien, 347 F. Supp. 2d 1299, 1307-08 (S.D. Fla. 2004) (finding reasonable

geographic restriction preventing employee from "working in any geographic

space in which [employer] operates" where employer had interest in confidential

information); see also Intermetro Indus. Corp. v. Kent, No. 07-cv-0075, 2007 WL

1140637, at *7 (M.D. Pa. Apr. 17, 2007) ("When the employer's protected

interests include information that may be competitively harmful to the employer in

any area it competes, then it is reasonable for a non-compete to extend to all areas

the employer competes.").

5. Intent To Breach The Competitor Non-Compete Covenant

Gordon also argues that because he had a good-faith reasonable belief that his

work for Highland in Canada did not violate the Agreement, the district court

should not have relied on his breach of the competitor non-compete covenant in

granting the injunction and tolling the six-month restrictive period. According to

Gordon, his belief was based on the fact that the competitor non-compete covenant

did not explicitly include a geographic scope and that his territory at Proudfoot did

not include Canada. In arguing that Proudfoot had to show that he intentionally

breached the competitor non-compete covenant, Gordon relies on Milner Voice

and Data, Inc. v. Tassy, 377 F. Supp. 2d 1209 (S.D. Fla. 2005), which required the

plaintiff to prove that the defendants intentionally breached the restrictive

31
covenants at issue in order to receive injunctive relief, id. at 1214 (citing Sarasota

Beverage Co. v. Johnson, 551 So. 2d 503, 508 (Fla. Dist. Ct. App. 1989)).

As an initial matter, Gordon assumes that if Florida law requires an intentional

breach of a restrictive covenant in order to grant an injunction, his breach of the

competitor non-compete covenant would not trigger the Agreement's tolling

provision unless that breach was intentional. However, all of the decisions that

Gordon cites to in arguing that Florida law requires an intentional breach discuss

intentional breach in the context of parties seeking a preliminary injunction.

Although it is unclear if Gordon is correct in assuming that the same standard

would also govern the tolling provision, it is unnecessary to resolve that question

because we are not persuaded that, in a case governed by Fla. Stat. § 542.335,

Florida law would refuse to grant injunctive relief if an employee reasonably

believed that his conduct did not violate the restrictive covenants at issue.

Some older Florida intermediate appellate court decisions have stated that a

plaintiff must prove that the defendant intentionally breached the restrictive

covenant in order to be entitled to a preliminary injunction, see, e.g., Sarasota

Beverage, 551 So. 2d at 508 (Fla. Dist. Ct. App. 1989); Silvers v. Dis-Com Secs.,

Inc., 403 So. 2d 1133, 1136 (Fla. Dist. Ct. App. 1981). Although these decisions

refer, in what is arguably dicta, to an "intent" element, none of these decisions

32
have held that a preliminary injunction should be denied if a plaintiff fails to prove

that the defendant intentionally breached the restrictive covenant at issue. Nor do

these decisions discuss or even mention the notion that a preliminary injunction

should be denied if a defendant has a good-faith reasonable belief that his conduct

did not violate the restrictive covenant at issue. In addition, these decisions are

questionable precedent because they appear to misconstrue prior authority.19

Moreover, all of the Florida state court decisions referring to an "intent" element

were decided under the earlier statute, Fla. Stat. § 542.33(2)(a), which does not

apply to the Agreement, Fla. Stat. § 542.331.

Fla. Stat. § 542.335(1)(h), which governs this case, states that "[t]he violation

of an enforceable restrictive covenant creates a presumption of irreparable injury

to the person seeking enforcement of a restrictive covenant." Nothing in the

statute suggests that intentional breach is a precondition to relief, and no Florida

19
The first Florida decision to discuss intentional breach in the context of a restrictive
covenant is Hunter v. N. Am. Biologicals, Inc., 287 So. 2d 726 (Fla. Dist. Ct. App. 1974). In
Hunter, the court affirmed a trial court's refusal to dismiss a complaint that alleged: "(a) [t]he
contract (b) [t]he [employee's] intentional direct and material breach thereof [and] (c) [n]o
adequate remedy except by injunctive relief." Id. at 728. The court in Hunter held that those
"allegations are sufficient to state a cause of action under the statute." Id. Subsequently, in
Silvers, 403 So. 2d at 1136, the court stated that "in [Hunter], we said that in order to state a
cause of action to enforce a covenant falling within the purview of the statute it was necessary
only to allege" the three elements cited in Hunter, including "intentional direct and material
breach." (Emphasis added). Thus, Silvers, the first decision to suggest that intent was a required
element, clearly misconstrues Hunter, which held that such allegations were sufficient, but never
found that they were necessary. We have found no Florida decisions prior to Hunter suggesting
that intentional breach must be shown in a restrictive covenant case.

33
state court decisions under this statute have required plaintiffs to prove intentional

breach in order to benefit from the statutory presumption of irreparable injury.20

The only decision discussing an intent element under the new statute is Milner

Voice and Data, Inc. v. Tassy, 377 F. Supp. 2d 1209, 1214 (S.D. Fla. 2005), a

federal district court decision that relies on Sarasota Beverage, 551 So. 2d at 508,

a case decided under the prior statute.

In addition, Fla. Stat. § 542.335(1)(h) states that:

A court shall construe a restrictive covenant in favor of
providing reasonable protection to all legitimate business
interests established by the person seeking enforcement.
A court shall not employ any rule of contract
construction that requires the court to construe a
restrictive covenant narrowly, against the restraint, or
against the drafter of the contract.

This section was added to Fla. Stat. § 542.335 in order to "legislatively discard[]

prior Florida decisions that invoked and applied such doctrines in restrictive

20
Prior to 1990, Fla. Stat. § 542.33(2)(a) stated that certain restrictive covenants "may, in
the discretion of a court of competent jurisdiction, be enforced by injunction." The statute had
been interpreted to establish a presumption of irreparable injury upon proof that a valid
restrictive covenant had been breached. See Capraro v. Lanier Bus. Prods., Inc., 466 So. 2d 212
(Fla. 1985). In 1990, the statute was amended to only allow a presumption of irreparable injury
in specific situations, such as "use of specific trade secrets, customer lists, or direct solicitation of
existing customers." All of the decisions referring to an intent element were decided under the
pre-1990 version of the statute. When Fla. Stat. § 542.335 was passed in 1996, the sentence
"[t]he violation of an enforceable restrictive covenant creates a presumption of irreparable injury
to the person seeking enforcement of a restrictive covenant" was included in order to
"re-establish[] the pre-1990 amendment rule of [Capraro]." Grant & Steele at 55. The
codification of the "pre-rule 1990 amendment rule," however, does not include any reference to
an intent requirement.

34
covenant cases." Grant & Steele at 55. The approach proposed by Gordon, which

would not even consider the employer's legitimate business interests, would

undermine the policy behind this section. It would make little sense for a court to

follow this section's mandate and construe a restrictive covenant broadly only to

turn around and conclude that the defendant's breach of the covenant should

nonetheless be excused because the defendant may have reasonably interpreted the

covenant more narrowly.21

Even assuming that intent would, in some circumstances, be relevant under

Florida law and that Gordon's belief was reasonable, we fail to see why such a

belief should have prevented the district court from using Gordon's breach as a

basis to toll the six-month restrictive period and to enjoin prospectively Gordon

from working for Highland. The fact that Gordon may have reasonably erred in

21
The cases relied upon by Gordon would survive if this section only applied to
monetary damages. There is, however, no indication that this section was intended to be so
limited. Such a limitation would make little sense as both the statute and Florida case law
acknowledge that injunctions are the primary tool to enforce restrictive covenants against
employees. See Fla. Stat. § 542.335(1)(j) ("A court shall enforce a restrictive covenant by any
appropriate and effective remedy, including, but not limited to, temporary and permanent
injunctions."); Capraro, 466 So. 2d at 213 ("[Although a] "court may award damages for breach
of contract . . . the normal remedy is to grant an injunction . . . . because of the inherently
difficult, although not impossible, task of determining just what damage actually is caused by the
employee's breach of the agreement." (quoting Miller Mechanical, Inc. v. Ruth, 300 So. 2d 11, 12
(Fla. 1974))). Not only can it be difficult to prove damages in such cases, but the fact that
defendant employees often have limited funds may render any damages remedy less than
adequate.

35
determining the scope of the competitor non-compete covenant does not grant him

a license to work for a competitor in violation of the Agreement.

C. Damages

The district court's damages award is overturned because there was no showing

that Gordon's breach caused the claimed damage. The $1,659,000 damages award

against Gordon was based on Gordon's contact with Bombardier in February 2007,

which led to Highland obtaining the "Bombardier Logistics" project. Although

the district court made certain factual findings regarding Bombardier, those

findings do not support the award and, in addition, fail to make findings on a

number of critical details from the trial testimony. Those details, which appear to

be undisputed, are noted below.

During the first half of 2006, Proudfoot was first introduced to, and began its

sales process with, Bombardier. Carvalho's testimony suggests that Proudfoot

Europe was the specific Proudfoot entity involved in this sales process. Proudfoot

submitted a proposal or bid to Bombardier in late May or early June 2006 while

Gordon was still employed by Proudfoot.22 After its proposal was accepted,

22
Because we reverse the damages award, it is unnecessary to address Gordon's
alternative argument that Carvalho's testimony regarding the timing of Proudfoot's proposal to
Bombardier was insufficient to establish that Bombardier qualified as a "client" under the
Agreement.

36
Proudfoot conducted a business review for Bombardier starting in mid-June 2006.

After the business review ended, Bombardier hired Proudfoot to conduct a

productivity-related project for Bombardier that included work focusing on lead

times, productivity gains and procurement. Carvalho testified that this project was

performed in the United Kingdom by Proudfoot Europe. In February 2007,

Bombardier interrupted the project, two months prior to its scheduled completion.

At trial, Carvalho admitted that Gordon did not work on Proudfoot's project for

Bombardier.

While at Highland, Gordon worked on two projects for Bombardier in Canada.

In September 2006, Gordon was assigned to a project for Bombardier called

"Bombardier Interiors," which had begun prior to Gordon joining Highland. In

February 2007, Gordon was personally involved in the "design and discovery"

phase of a second project for Bombardier called "Bombardier Logistics." During

the "design and discovery" phase, Highland would do an initial analysis for a

client in the hopes of convincing the client to hire Highland for an implementation

project. Gordon attended all the formally scheduled meetings with Bombardier

and all of the meetings where Highland made presentations to Bombardier about

the proposed project. At these meetings, Gordon explained the benefits of the

proposed project to Bombardier. Bombardier elected to hire Highland for the

37
proposed project, which ultimately generated $2,600,000 in revenue for Highland.

The initial "design and discovery" phase of this second project generated an

additional $165,000 in revenue for Highland.

The district court made no findings about the details of either of Highland's

projects for Bombardier. At trial, however, Gordon testified that the Bombardier

Interiors project involved helping Bombardier pass FAA certification for "burn

tests" concerning the interiors of an aircraft. Gordon also testified that the

Bombardier Logistics project, which involved a different division at Bombardier

that builds different types of aircraft, was similar to the first project in that the

primary objective for both projects was "look[ing] at ways in which they could

better produce the aircraft to meet FAA guidelines in a faster fashion and mitigate

some of the snags that they were having problems with." As noted earlier, the

only evidence about Proudfoot Europe's Bombardier project was that it was a

productivity-related project that included work focusing on lead times,

productivity gains and procurement. Thus, based on this sparse record, it is

impossible to determine if Highland's Bombardier projects were even similar to

Proudfoot's Bombardier project. Also, there is no evidence suggesting any link

between the interruption of Proudfoot Europe's Bombardier project and Highland's

"Bombardier Logistics" project.

38
After finding that Gordon's contact with, and solicitation of, Bombardier in

February 2007 violated the non-solicitation clause and client non-compete

covenant, the district court concluded that this breach entitled Proudfoot to

$1,659,000 in damages, "an amount equal to the profits Gordon helped to generate

for Highland from [the 2007] Bombardier project . . . ." The district court

explained that "[s]uch ill-gotten profits are inextricably linked to Gordon's breach

of the Restrictive Covenants." In justifying this finding, the district court, citing

First Miami Secs., Inc. v. Bell, 758 So. 2d 1229, 1230 (Fla. Dist. Ct. App. 2000)

(per curiam), noted that "[w]hen a former employee solicits clients in violation of

a restrictive covenant, at least one Florida court has calculated the former

employer's losses by looking to the revenues earned as a result of the solicitation."

Fla. Stat. § 542.335(1)(j) states that "[a] court shall enforce a restrictive

covenant by any appropriate and effective remedy, including, but not limited to,

temporary and permanent injunctions." Thus, Proudfoot may seek damages for

any breaches of the enforceable restrictive covenants in the Agreement, but "[a]n

award of damages for breach of contract is intended to place the injured party in

the position he or she would have been in had the breach not occurred."

Mnemonics, Inc. v. Max Davis Assocs., Inc., 808 So. 2d 1278, 1280 (Fla. Dist. Ct.

App. 2002). As one court has explained:

39
To recover damages for lost profits in a breach of
contract action, a party must prove a breach of contract,
that the party actually sustained a loss as a proximate
result of that breach, that the loss was or should have
been within the reasonable contemplation of the parties,
and that the loss alleged was not remote, contingent, or
conjectural and the damages were reasonably certain.

Frenz Enters., Inc. v. Port Everglades, 746 So. 2d 498, 504 (Fla. Dist. Ct. App.

1999) (emphasis added); see also W.W. Gay Mech. Contractor, Inc. v. Wharfside

Two, Ltd., 545 So. 2d 1348, 1351 (Fla. 1989) (per curiam) (stating that in order to

recover lost profits a plaintiff must prove that "the defendant's action caused the

damage"). Thus, Proudfoot bears the burden to prove both that it sustained a loss

and that "its lost profits were a direct result of" Gordon's breaches of the client

non-compete covenant and non-solicitation clause. Whitby v. Infinity Radio Inc.,

951 So. 2d 890, 898 (Fla. Dist. Ct. App. 2007) (applying these principles in the

context of a covenant not to compete under Fla. Stat. § 542.335).

Although, under Florida law, "uncertainty as to the precise amount of the lost

profits will not defeat recovery so long as there is a reasonable yardstick by which

to estimate the damages," causation must be "proved with reasonable certainty."23

Nebula Glass Intern., Inc. v. Reichhold, Inc., 454 F.3d 1203, 1213, 1217 (11th Cir.

23
Even though plaintiffs have some leeway in estimating the amount of damages,
calculating damages may still be difficult, which no doubt explains why many restrictive
covenants have liquidated damages clauses.

40
2006) (citing W.W. Gay, 545 So. 2d at 1350-51); see also TruGreen Cos., L.L.C.

v. Mower Bros., Inc., 199 P.3d 929, 932-33 (Utah 2008) (surveying cases

involving covenants not to compete in the employment context and holding that

although a defendant's profits may be relevant in measuring the amount of a

plaintiff's lost profits, plaintiff must still prove the "fact of damages"). One of the

reasons why injunctions are a favored remedy for breaches of restrictive covenants

is that it is "inherently difficult" to determine "what damage actually is caused by

the employee's breach of [of a restrictive covenant]." Capraro v. Lanier Bus.

Prods., Inc., 466 So.2d 212, 213 (Fla. 1985) (citation omitted).

The district court erred, as a matter of law, in awarding Proudfoot damages for

Gordon's solicitation of Bombardier because the district court never found that

absent Gordon's breach, Proudfoot would have obtained the Bombardier Logistics

project. Moreover, even if the district court had made such a finding, neither the

underlying facts found by the district court nor any evidence in the record could

support such a conclusion. The fact that Highland's "profits are inextricably

linked to Gordon's breach of the Restrictive Covenants" is irrelevant absent a

finding that Gordon's solicitation of Bombardier caused Proudfoot to lose

business. Damages for breach of a non-compete are intended to make the prior

employer whole, not to punish employees.

41
The cases relied on by Proudfoot and the district court do not hold that

Proudfoot can recover damages without having to prove that it suffered a loss

caused by Gordon's breach. Rather, these cases, which do not explicitly discuss

the issue of causation, simply suggest that if Proudfoot could show that it lost the

Bombardier Logistics project due to Gordon's breach, the amount of Proudfoot's

lost profits could be calculated by looking at Highland's profits.

In First Miami, 758 So. 2d 1229, the defendant employee had used confidential

information to solicit customers from his former employer, resulting in some of

the accounts being transferred to his new employer. The trial court had concluded,

based on various records regarding the transferred accounts, that "damages can be

readily calculated from the commissions derived by Defendant at his new place of

employment." Id. at 1230. While First Miami never explicitly discusses

causation, the decision clearly implies that but for the defendant's solicitation, the

transferred accounts would have stayed at the former employer. Under such

circumstances, it may be reasonable to assume that, absent the defendant's

solicitation, those accounts would have generated the same amount of

commissions if they had remained with the former employer.

Similarly, in Litwinczuk v. Palm Beach Cardiovascular Clinic, L.C., 939 So. 2d

268, 272 (Fla. Dist. Ct. App. 2006), where a doctor began seeing patients from his

42
former employer, causation was not at issue. In Litwinczuk, the court merely

implied that the former employer's losses may have been "calculable" based on

what the doctor was currently billing those patients. Moreover, the cases from

other jurisdictions cited to in the district court's decision all involve similar

scenarios where there was no dispute that the loss suffered was caused by the

breach.

Here, however, there is simply insufficient direct or circumstantial evidence in

the record from which it could reasonably be inferred that Proudfoot lost the

Bombardier Logistics Project to Highland. Contrary to Proudfoot's claim, the fact

that Proudfoot would have been able to perform the work on the Bombardier

Logistics project does not, standing alone, show that Proudfoot would have

obtained the project absent the involvement of Highland (or, more specifically, of

Gordon).

Proudfoot chose not to call any witnesses from Bombardier to testify about the

Bombardier Logistics project. While Proudfoot may have had sound business

reasons to avoid embroiling a client in this litigation, without such testimony the

record is devoid of any evidence that Proudfoot lost the Bombardier Logistics

project to Highland. See Nebula Glass, 454 F.3d at 1215 (finding evidence

sufficient to show that defective component provided by defendant caused

43
plaintiff to lose customers where, inter alia, two customers testified that they

stopped purchasing plaintiff's product because of the defective component).

Moreover, Proudfoot did not provide any records indicating that it had made a

proposal in connection with the Bombardier Logistics project and offered no

evidence that it had any, even embryonic, plans for proposing a similar project to

Bombardier. Nor was there any testimony that Proudfoot would have eventually

pitched this project to Bombardier.

Furthermore, the district court found few facts concerning the origin of the

Bombardier Logistics project. The district court simply found that in February

2007, Gordon was personally involved in the "design and discovery" phase of this

project. Without knowing how Highland secured this project, it is impossible to

infer that Proudfoot ever even had a chance at obtaining the project. Similarly,

there is little evidence about the origin of Proudfoot Europe's own Bombardier

project and no evidence about Bombardier's process for awarding consulting

projects. It should be noted that Gordon testified that Highland obtained the

Bombardier Logistics project because of an internal Bombardier referral based on

the successful delivery of the Bombardier Interiors project.24 The district court

24
The district court based the damages award solely on Gordon's solicitation of the
Bombardier Logistics project, never mentioning the Bombardier Interiors project in its discussion
of damages. As noted earlier, Highland began working on the Bombardier Interiors project

44
never found that this testimony was not credible and there was no competing

evidence offered by Proudfoot to explain the origins of the Bombardier Logistics

project.

In addition, given the scant details about both the Bombardier project

performed by Proudfoot Europe and Highland's Bombardier projects, it is

impossible to infer that Proudfoot Europe's work for Bombardier would have

necessarily led to Proudfoot securing the Bombardier Logistics project. The

record also shows that Highland's Bombardier projects were performed in Canada,

whereas Proudfoot Europe's project occurred in the United Kingdom. Notably,

there is no evidence that Proudfoot ever even sought to perform any projects for

Bombardier in Canada.

Finally, we note that the use of the term "ill-gotten profits," which is found in

both the district court's decision and throughout Proudfoot's brief, reveals what

Proudfoot is truly seeking – not damages it suffered – but simply disgorgement of

Highland's profits. Yet, Proudfoot conspicuously avoids explicitly raising this

argument and cites to no authority showing that Florida law permits disgorgement

of profits for breach of contract.25 While Proudfoot points to the equitable

before Gordon joined Highland.
25
If the violation of a restrictive covenant also involves misappropriation of trade secrets,
a court is empowered to grant relief beyond ordinary contract damages. See Fla. Stat. § 688.004.

45
principle that "‘no one shall be permitted to profit by his own fraud, or take

advantage of his own wrong, or found any claim upon his own iniquity, or profit

by his own crime,'" Cabrerizo v. Fortune Intern. Realty, 760 So. 2d 228, 229 (Fla.

Dist. Ct. App. 2000) (quoting Ashwood v. Patterson, 49 So. 2d 848, 850 (Fla.

1951)), Proudfoot cites to no authority applying this principle to award

disgorgement of profits as damages in a breach of contract case. As this Court has

recognized, under Florida law, disgorgement of profits earned is not a remedy for

breach of contract.26 Burger King Corp. v. Mason, 710 F.2d 1480, 1494 (11th Cir.

1983). Moreover, even if disgorgement were an appropriate remedy, Proudfoot

seeks the "ill-gotten profits" of Highland, who is not even a party to this litigation.

Proudfoot alternatively argues that we should remand this case back to the

district court for a damages finding pursuant to an alternative methodology. In

Proudfoot's Proposed Findings, Proudfoot presented two alternative damages

proposals. First, Proudfoot argued that it is entitled to the total profits that

(allowing court to award unjust enrichment beyond actual loss caused by misappropriation or "a
reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret."). The
instant case does not involve trade secrets.
26
In the specific context of contracts to purchase real property, the Florida Supreme
Court has held that "[a] seller will not be permitted to profit from his breach of a contract with a
buyer, even absent proof of fraud or bad faith, when the breach is followed by a sale of the land
to a subsequent purchaser." Coppola Enters., Inc. v. Alfone, 531 So. 2d 334, 335-36 (Fla. 1988).
We have found no Florida authority suggesting that this principle permits disgorgement of profits
in an ordinary breach of contract action.

46
Highland earned on all projects that Gordon worked on for Highland through the

date of trial. This theory is untenable for many of the same reasons that we

reverse the district court's damages award. Second, Proudfoot argues that, "as a

matter of equity," Gordon should be "required to disgorge" to Proudfoot the total

compensation that he received while employed at Highland. The authority relied

on by Proudfoot does not persuade us that Florida law would permit such relief in

this context. For example, Proudfoot cites to Phillips Chem. Co. v. Morgan, 440

So. 2d 1292 (Fla. Dist. Ct. App. 1983), which required disgorgement where the

employee received kick-backs in breach of his fiduciary duty to his employer.

That circumstance is clearly dissimilar. As such, we find no reason to remand the

damages issue back to the district court.27

27
As Proudfoot has never clearly raised a claim of unjust enrichment or restitution, it is
unnecessary to determine whether such claims would be actionable in this context. Even if
Proudfoot had pursued such relief, one element of an unjust enrichment claim is that "it would be
inequitable for the defendant to retain the benefit without paying fair value for it." Banks v.
Lardin, 938 So.2d 571, 577 (Fla. Dist. Ct. App. 2006) (emphasis added), review denied, 959
So.2d 718 (Fla. 2007). We fail to see how the amount of total compensation earned by Gordon at
Highland would be indicative of the value of any benefits that Proudfoot may have conferred
upon him. Although Gordon received a raise when he joined Highland, it is difficult to
understand how Proudfoot could even attempt to quantify the portion of that increase that is
attributable to Gordon's knowledge of Proudfoot's confidential information. In any event, that
question is purely academic as Proudfoot has made no such attempt.

47
IV. CONCLUSION

Although Gordon has failed to establish that the injunction was inappropriate,

we reverse the damages award. Proudfoot did not establish that it would have

obtained the Bombardier Logistics project were it not for Gordon's breach;

accordingly, Proudfoot has failed to establish that it suffered any financial loss.

REVERSED.

48

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/78411. Public record. Not legal advice.