United States: When Will Florida Courts Award Attorney's Fees In Non-Compete Litigation?

It is a fundamental rule of Florida law that an award of attorney's fees is contrary to common law and will only be granted pursuant to contractual or statutory authority. See, e.g., Consol. Ins. Servs. v. Freeman, 848 So.2d 444, 447 (Fla. 4^th DCA 2003)(citations omitted); see also, Attorney's Title Insurance Fund, Inc. v. Landa-Posada, 984 So.2d 641, 643 (Fla. 3d DCA 2008)(holding that "[a]ttorney's fees cannot be awarded as a matter of equity."). For parties litigating over the validity of a non-compete agreement, they must either rely on the statute or the terms of the contract in order to recover attorney's fees. Florida Statute § 542.335(1)(k) authorizes a court to award attorney's fees to the prevailing party in non-compete litigation. Section 542.335(1)(k) provides as follows:

The attorney's fee provision of Fla. Stat. § 542.335 was recently applied in Rogers v. Vulcan Manufacturing Co., Inc., 93 So.3d 1058 (1^st DCA 2012). In Rogers, an employer sued its former employee alleging the employee breached a non-compete agreement by accepting employment with a competitor. The action was eventually dismissed for failure to prosecute, and the employee sought attorney's fees as the prevailing party. The trial court granted the employee an attorney fee award of $0.00, basing its decision in part on the fact that the employee's new employer paid for the litigation. Id. at 1059. On appeal, the First District reversed, finding that because the employee was the prevailing party in an action to enforce a non-compete agreement, the employee was entitled to attorney's fees representing the cost to defend the action regardless of whether the employee was the one who actually paid for the legal services. Id. at 1061.

In Puleo v. Morris, 98 So.3d 248 (Fla. 2d DCA 2012), the Second District also awarded attorney's fees to the prevailing party under Fla. Stat. § 542.335(1)(k). In Puleo the employer sought to enforce a non-compete agreement against a former employee. The employee opposed enforcement and ultimately prevailed against the employer. Next, the employee sought attorney's fees and costs as the prevailing party. The trial court awarded the employee $146,500 in attorney's fees, an amount substantially less that the amount of fees incurred by the employee in opposing enforcement of the non-compete agreement. Id. at 248-49.

On appeal, the Second District reversed the order and remanded to the trial court for a new order. In reaching its decision, the Second District agreed with the employee that the trial court erred in reducing the amount of attorney's fees without making any findings concerning "the reasonable hours expended, the reasonable hourly rates or the specific reasons for reducing the requested fees." Puelo, 98 So.3d at 249-50, citing Fla. Patient's Comp. Fund v. Rowe, 472 So.2d 1145, 1151 (Fla. 1985). Because the trial court in Puelo failed to make the required findings regarding a reasonable amount of hours billed by the employee's attorneys, or provide specific reasons for reducing the fee request, the Second District found the omissions "required reversal." Id. at 250.

The employee in Puleo presented the trial court with testimony from his attorney, an expert witness, as well as his own testimony in support of the fee request. Id. at 249. In reversing the decision back to the trial court, the Second District noted that the trial court was not "bound by the time and billing records presented or by the expert witness's testimony about the reasonableness of the fees requested." Id. at 250. Instead, the court is permitted to reduce the amount of attorney's fees sought, provided it "makes the requisite findings to support that determination." Id.

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