On July 30, 2009, the Eleventh Circuit reversed a district court decision granting over $1.6 million in damages to a former employer, but upheld an injunction against the former employee, enforcing a non-compete agreement. In Proudfoot Consulting Co. v. Gordon, No. 09-14075, Judge Trager issued an opinion finding that a non-compete agreement that prevented a former Project Director from competing in North America and any other territory to which the employee had been assigned during his employment for six months following his employment was enforceable under Florida law.
As Project Director, the former employee, Gordon, managed client relationships and was the most senior employee who had routine client contact. One of his duties was to attend weekly meetings that reviewed all of Proudfoot’s North American projects. In addition, Gordon visited Canada once on behalf of Proudfoot. After resigning from Proudfoot, Gordon immediately began working for a direct competitor, the Highland Group, but Gordon worked exclusively in Canada for the first six months of his employment. After joining the Highland Group, Gordon secured a substantial project for the Highland Group from a client that did business with Proudfoot’s European sister company.
The Court of Appeals affirmed the district court’s finding that Gordon violated the non-compete agreement and that the non-compete was reasonable in its geographic scope, which was found to cover the United States, Mexico, Canada, and Europe. The scope was reasonable because Proudfoot conducts operations and markets itself in those territories, Gordon visited one client project in Canada, and Gordon attended weekly meetings that discussed Proudfoot’s North American projects. The district court rejected Gordon’s argument that he had a good-faith belief that working in Canada did not violate the agreement. The Court held that the district court’s injunction that was entered against Gordon, preventing him, for six months, from working for the Highland Group and from soliciting Proudfoot’s clients and employees was proper.
However, the Court of Appeals reversed the district court’s award of over $1.6 million in damages, plus attorneys’ fees, to Proudfoot because Proudfoot did not establish that it would have secured the project that Gordon solicited for the Highland Group, but for Gordon’s breach. The Court held that Proudfoot, thus, did not show that it suffered any financial loss due to Gordon’s actions.