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Florida Court Rejects Independent Contractor's Defense to Noncompete Lawsuit that Employer Defrauded Independent Contractor into Entering Contract Containing a Noncompete Agreement

Picture it Sold Photography (“PSP”) hired Scott Bunkelman, by oral agreement, to provide photography services as an independent contractor. Later, the terms of Bunkelman’s employment were memorialized in a written independent contractor agreement. The agreement contained a non-solicitation and non-compete agreement.

The initial term of the agreement was one year, with an automatic renewal provision for additional one-year periods, unless terminated by either party by written notice.

Thereafter, Bunkelman violated the non-solicitation and non-compete agreement and PSP sued. PSP also filed an emergency motion for temporary injunction.

At the hearing, Bunkelman admitted that he was unsatisfied with his earnings and had been providing services to some of PSP’s customers on the side without PSP’s knowledge or consent. Bunkelman argued that the agreement was invalid because PSP fraudulently induced him to enter the agreement by assuring him a $60,000 salary which Bunkelman said he never earned because PSP did not send him enough business. Bunkelman also argued that PSP had assured him that most of his work would be in northern Palm Beach county, but it turned out that most of his work was in southern Palm Beach county and Broward county.

The trial court denied PSP’s motion for temporary injunction stating that while the agreement was reasonably necessary to protect PSP’s legitimate business interests and that it wasn’t overbroad, overlong or otherwise unreasonable, Bunkelman had provided credible and unequivocal evidence that PSP made fraudulent misrepresentations to Bunkelman as to the salary Bunkelman would earn and the location of his work.

PSP appealed and the Fourth District Court of Appeal found that the trial court erred in denying PSP’s motion for temporary injunction. Specifically, the Fourth DCA held that even if salary and geographic region were promised to Bunkelman orally, Florida law is clear, a party cannot recover in fraud for oral misrepresentations that are latter contradicted in a written contract. Additionally, the Fourth DCA held that based on the one-year term and renewal provisions of the agreement, Bunkelman did not present sufficient evidence of reliance on the misrepresentations as to salary or location of the work. Because Bunkelman clearly renewed the agreement by continuing to work after the first year, despite being aware of the alleged misrepresentations and accordingly, waived his right to assert a claim of fraudulent inducement.

Whether you are an employer, employee or independent contractor involved in a non-competition/non-solicitation dispute, Rosenthal Law Group is available to offer guidance and representation to assist you in your matter.

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