Motion,Ex Parte: Apex Services Partners, LLC vs McCabe, Richard

On February 23, 2024 a Motion,Ex Parte was filed involving a dispute between Apex Services Partners, Llc, Apex Southeast Region Holdco, Llc, and Hall, Brett, Legacy Service Partners, Llc, Mccabe, Richard, for Civil in the District Court of Hillsborough County.

Preview
Filing # 192625751 E-Filed 02/23/2024 02:44:42 PM

IN THE CIRCUIT COURT OF THE
THIRTEENTH JUDICIAL CIRCUIT IN
AND FOR HILLSBOROUGH COUNTY,
FLORIDA

CASE No.:

APEX SERVICE PARTNERS, LLC & APEX
SOUTHEAST REGION HOLDCO, LLC,

Plaintiffs,

vs.

RICHARD MCCABE, BRETT HALL, and
LEGACY SERVICE PARTNERS, LLC,

Defendants.
_____________________________________/

PLAINTIFFS’ EMERGENCY MOTION FOR TEMPORARY INJUNCTION,
WITH INCORPORATED MEMORANDUM OF LAW

Plaintiffs Apex Service Partners, LLC and Apex Southeast Region Holdco, LLC

(together, “Apex”), by and through undersigned counsel, and, pursuant to Rule 1.610

Fla.R.Civ.P., file their Motion for Temporary Injunction (the “Motion”) against Defendants,

Richard McCabe (“McCabe”), Brett Hall (“Hall”), and Legacy Service Partners, LLC (“Legacy,”

and, together, “Defendants”), along with their incorporated Memorandum of Law. 1

1
This Motion is supported by the Emergency Verified Complaint for Injunctive Relief
(“Compl.”) and the Declarations of Brad Schwartz (“Schwartz Dec.”) and Tracy York (“York
Dec.), all of which are incorporated herein. The Declarations are attached hereto.

DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 1
PRELIMINARY STATEMENT

Apex and Legacy are direct competitors in the heating, cooling, and plumbing trade

business. Both Apex and Legacy are headquartered in Tampa, but compete in many of the same

markets across the nation.

McCabe and Hall are former senior level employees of Apex. See Schwartz Dec. Apex

recently learned that both McCabe and Hall have gone to work for Legacy, Schwartz Dec., Ex.

2., in violation of the 24 month non-compete covenants contained in the Business Protection

Agreements that each signed at the outset of their employment. Schwartz Dec. ¶ 9, Ex. 4.

Hall and McCabe resigned from Apex in April 2022 and January 2024, respectively, and

are now brazenly competing against Apex in roles modeled directly on their work for Apex. Hall

has done so surreptitiously, hiding his work though an inaccurate public-facing professional

profile on Linkedin. Schwartz Dec., Ex. 1.

Much more recently, McCabe directly lied to and deceived Apex by repeatedly telling

Apex’s executives he was departing to work in a different, non-competitive industry in a specific

position with a family member—which caused Apex to permit him continued access to its trade

secrets and confidential information during his “two weeks notice” transition period. Schwartz

Dec. ¶ 10. At the same time, McCabe downloaded trade secret information from the Apex’s

secure electronic drives, including, but not limited to, a copy of Apex’s meticulously-crafted

value creation playbook for integrating and maximizing the competitiveness of a newly acquired

affiliate—part of a methodology developed through years of effort and hundreds of millions of

dollars, and representing a key competitive edge of Apex over its competitors. Schwartz Dec. ¶

11. Similarly, in the days leading to his departure, Hall sent to his personal email address

documents containing sensitive and proprietary Apex information. Schwartz Dec. ¶ 13.

2
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 2
In their new jobs with Legacy, McCabe and Hall are capitalizing on all of the confidential

and trade secret information they accessed and acquired during their tenure at Apex. The

companies, their businesses, and McCabe’s and Hall’s roles are so similar that it is impossible

for McCabe and Hall to perform their functions for Legacy without drawing upon the business

strategies, methodologies, and resources they absorbed or outright misappropriated from Apex.

Indeed, Legacy is engaged in precisely the same effort as Apex—competing to acquire

promising new affiliates on favorable terms, then attempting to maximize the reach and

profitability of those new affiliates in order to edge out other firms in a given marketplace.

In addition to violating their enforceable non-competition covenants, McCabe and Hall

are also violating both contractual covenants governing Apex’s Confidential Information and

Florida’s trade secrets statute. Apex requires an emergency injunction against McCabe and Hall

because Apex’s business is at risk if the violations are not stopped immediately.

MEMORANDUM OF LAW

I. FACTUAL BACKGROUND

To avoid unnecessary duplication, the factual background is set forth in detail in the

Emergency Verified Complaint filed in this matter, which is incorporated by reference herein in

its entirety.

II. LEGAL STANDARD

Apex is entitled to the injunctive relief it seeks because it has shown that: (1) it will suffer

irreparable harm absent an injunction; (2) it possesses no adequate remedy at law; (3) it has a

substantial likelihood of success on the merits of its claims; and (4) an injunction is not adverse

to the public interest. Medco Data, LLC v. Bailey, 152 So. 3d 105, 106 (Fla. 2d DCA 2014).

3
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 3
III. ARGUMENT

A. Apex is Entitled to Preliminary Injunctive Relief on its Breach of Non-Compete
and Confidentiality Provisions

1. Governing Law

The Business Protection Agreements signed by Hall and McCabe contain an identical

governing law provision which provides that: “[t]he Parties agree that this agreement, and all

claims, disputes and controversies related hereto or arising herefrom, shall be governed by, and

construed, applied, and enforced in accordance with the laws of the State of Florida without

regard to conflict of law principles.” See Compl., Exhs. “A” and “B.” Under Florida Choice of

Law rules, the law of the jurisdiction where the contract was executed governs the interpretation

of the contract. State Farm Mut. Auto. Ins. Co. v. Roach, 945 So. 2d 1160, 1163 (Fla. 2006).

Both agreements were executed in Florida, and thus Florida law applies to both.

2. Preliminary Injunctive Relief is Warranted to Enforce the Non-
Competition Restrictive Covenants.

Apex has a substantial likelihood of success on the merits of its non-compete claims; will

suffer irreparable injury absent injunctive relief; lacks an adequate remedy of law; and seeks an

injunction that is not adverse to the public interest. Medco Data, LLC, 152 So. 3d at 106.

a. Apex has a Likelihood of Success on the Merits Because the Non-
Competition Covenants are Enforceable under Florida Law

Restrictive covenants in Florida must be set forth in “a writing signed by the person

against whom enforcement is sought” and be supported by a legitimate business interest. Fla.

Stat. § 542.335(1)(a). A party seeking to enforce a restrictive covenant must prove: (1) “the

existence of one or more legitimate business interests justifying the restrictive covenant;” and (2)

“that the contractually specified restraint is reasonably necessary to protect the legitimate

4
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 4
business interest or interests justifying the restriction.” Fla. Stat. §§ 542.335(1)(b), (c). The

covenants Apex seeks to enforce satisfy each of these requirements.

Additionally, Apex Southeast Region Holdco, LLC is an Affiliate of Apex Services

Partners, LLC, and, per the terms of the Business Protection Agreement, is a party to the

agreement. Accordingly, Apex Southeast Region Holdco, LLC may enforce the agreement. See

Arthur J. Gallagher Service Co. v. Egan, 514 F. App’x. 839, 842 (11th Cir. 2013).

i. McCabe’s and Hall’s Covenants Protect Apex’s Legitimate
Business Interests

Trade secrets, valuable confidential business or professional information, substantial

relationships with specific prospective or existing clients, client goodwill, and extraordinary or

specialized training are all “legitimate business interests” that can support enforcement of a

restrictive covenant. Fla. Stat. § 542.335(1)(b); White v. Mederi Caretenders Visiting Servs. of

Se. Florida, LLC, 226 So. 3d 774, 780 (Fla. 2017). Those are precisely the types of interests that

Apex seeks to protect. “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

contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to

protect the established legitimate business interest[s].” Proudfoot Consulting Co. v. Gordon, 576

F.3d 1223, 1231 (11th Cir. 2009) (quoting Fla. Stat. § 542.335(1)(c)). Courts must “construe a

restrictive covenant in favor of providing reasonable protection to all legitimate business

interests established by the person seeking enforcement.” Autonation, Inc. v. O’Brien, 347 F.

Supp. 2d 1299, 1304 (S.D. Fla 2004) (citing Fla. Stat. § 542.335(1)(h); AutoNation, Inc. v. Maki,

No. 03-18896 CACE(03), 2004 WL 1925479, *3 (Fla. Cir. Ct. Aug. 25, 2004)), aff'd, 895 So. 2d

453 (Fla. 4th DCA 2005).
5
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 5
McCabe and Hall were high-level Apex employees. McCabe was responsible at an

executive level for all human resources functions at Apex Southeast Region, and for substantial

contributions in the same sphere at Apex Service Partners. This gave him direct, company-wide

insight and influence into matters like labor margins, trade technician performance and

profitability, staffing flow during seasonal swings in heating and cooling markets, and the

integration of staff for new affiliates. These are critical elements of Apex’s overall business

strategy. As Director of Finance, Hall played an integral role at Apex on a national level,

refining the financial reporting system utilized by Apex to this day. Hall analyzed current

reporting procedures and playbooks, participated in due diligence of potential affiliates, and

developed analytics for existing business models – providing him critical insight into the

company’s operations. Even without access to any documents, McCabe and Hall possess a

virtual encyclopedia of Apex’s methodologies and other confidential business information

This information was developed and gathered by Apex over the course of many years, at

great investment cost, and as a result, Apex has a legitimate business interest in protecting this

information. See, e.g., Open Magnetic Imaging, Inc. v. Nieves-Garcia, 826 So. 2d 415 (Fla. 3d

DCA 2002) (finding that the employer’s database system, containing the idiosyncrasies of

customer practices, was a legitimate business interest entitled to protection under Fla. Stat. §

542.335).

McCabe and Hall hold an intricate blueprint of Apex’s comprehensive operational

strategies and market expansion tactics, including nuanced insights into potential acquisitions

and integration plans and a detailed roadmap of the acquisition process that have been carefully

built to give Apex a competitive advantage. There are two main drivers of Apex’s business

success. The first is acquisitions, which drive market share and the ability of Apex to expand that

6
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 6
successful model into new markets through the development of carefully vetted affiliates, and

then—critically—to maximize the immediate competitiveness of those affiliates in order to seize

and retain market share in highly competitive regions. The second is integration strategies, which

position Apex from the outset of each acquisition to operate effectively, efficiently, and

profitably. Apex’s success in these two areas was not built cheap. Its unique methodologies for

these keys to its business were painstakingly compiled and developed at great effort and expense

and are entrusted for further development and execution only to senior leaders of Apex like

McCabe. It is the closely-held “confidential business information crucial to the success” of

Apex’s business. Proudfoot, 576 F.3d at 1233. McCabe’s access to and use of those

methodologies—including both the confidential “Boards” and other documents he illicitly

accessed immediately prior to his deceptive resignation from Apex and the critical knowledge he

accessed and absorbed for years due to his trusted position at Apex—will cause immediate and

irreparable harm to Apex when deployed in his work at Legacy Service Partners. Such an event

will not only undermine Apex’s competitive stance but could also significantly disrupt its

strategic expansion efforts and operational efficiencies.

In a similar fashion, Hall had a unique role at Apex that gave him direct access to Apex’s

structuring systems, acquisition plans, and value-added strategies. Hall was integral in combing

data from separate Apex entities to conduct comparative analysis to contribute to Apex’s

competitiveness – the basis for the methodology and analysis still employed at Apex. Moreover,

Hall participated in the diligence process of prospective acquisitions, conductive comparative

analysis of existing businesses, and would leverage data from all available resources to develop a

key understanding of Apex’s methodology to arrive at specific pricing plans in a given

7
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 7
geographical reason. Hall is equipped to teach a direct competitor, like Legacy, to identify value

prospects and unlock value in ways that were developed by Apex and took years to create.

The trade secrets and confidential information accessed daily by McCabe and Hall—and,

in substantial part, illicitly downloaded by McCabe the day before he gave notice to Apex—

covered the entire field of Apex’s competitive advantage. For example, they had regular access

to the detailed labor margin targets for particular geographies, which are essential to making

affiliates in those markets profitable. Those targets took years to develop, and the information is

closely and securely held—though Hall and McCabe had access to it and contributed to its

development. Conveyance of the labor target figures themselves, or the methodology for

developing them, gives a competitor like Legacy a massive unearned advantage by eliminating

Apex’s unique understanding of the labor market in particular locations.

McCabe, in particular, also has a systemic understanding through his regular access to

confidential Apex information of which particular skilled technical tradesmen are the most

profitable. While the average “tech” is profitable; a small percentage of Apex’s “techs” are

exponentially profitable—sometimes bringing the Company ten times or more the annual

revenue of the average tradesman. That information is closely held, but McCabe had

untrammeled access to it and contributed to developing and maintaining it. Conveyance of that

knowledge to Legacy would instantly make those top-rated tradesmen coveted recruitment

targets; and losing just one of them would have a calamitous effect on Apex’s bottom line.

McCabe and Hall also had access to more Company-wide closely and securely held,

sensitive, and confidential information relating to pay and commissions plans used by Apex to

attract and retain top personnel. In the hands of Legacy or another competitor, that information

would empower the competitor to effectively undercut Apex market-wide. Like a contestant on

8
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 8
“The Price is Right,” the competitor can set its bid just a few dollars or percentage points above

Apex to out-compete it for the talent pool that ultimately drives profits. Much of this information

is maintained on a secure account for Apex on “Power BI,” a repository of critical data to which

McCabe and Hall had access. The items noted are just a sliver of the comprehensive operational

data contained on Power BI that could be weaponized to help Legacy compete with Apex.

Hall and McCabe also had access to live, highly sensitive information about Apex’s

acquisition targets, metrics, analyses, target prices, valuations, and strategies—critical

competitive information in an industry wherein the fight to acquire affiliates and thus expand

coverage territory into underserved markets is intense. And perhaps even more critical, they had

access to Apex’s painstakingly and expensively developed acquisition and post-acquisition

methodology—deployed with new affiliates immediately upon acquisition to swiftly convert

potential into operational efficiency and excellence, real territorial expansion, market share, and

ultimately profits. That methodology goes far beyond “sell more HVAC units at higher prices.”

It is, in fact, a game plan consisting of literally hundreds of interlocking parts and tasks in a

discrete order of accomplishment and compiled into critical objectives, each building upon the

last and the next to squeeze every bit of bottom-line business potential from an affiliate. The

language and ordering of the tasks is itself confidential information, but together the

methodology answers key questions like: “Without losing key personnel or customer goodwill,

how do we transition this affiliate from its existing sales practices to practices that maximize

profits per customers and the conversion of leads to customers?” and, “How do we swiftly

optimize the affiliate’s operations to reduce costs and thus increase profits?” Using this hard-

developed methodology to achieve these (and similar) goals makes Apex the Company that it

is—capable of out-competing the industry by making its new affiliates more expansive, more

9
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 9
attractive, better-staffed, and more profitable. The interlocking tasks critical to doing so are listed

out on a detailed electronic playbook maintained by Apex on its secure site account at

“monday.com.” Schwartz Dec. ¶ 11. Hall and McCabe both accessed it regularly, learned its

intricacies, and helped to refine it. On January 8, 2024—one day before giving notice to Apex

(falsely) that he was leaving for a non-competitive job in the healthcare industry—McCabe

downloaded the entire “Onboarding Post-Close” and “Strategic Levers Post-Close” Boards

containing Apex’s entire playbook for an acquisition to his personal laptop. See York Dec. Ex. I.

Shortly before that, McCabe accessed or downloaded an array of even broader Apex

trade secrets and confidential information. Apex’s SharePoint analytics reveal that McCabe used

his personal computer to access and/or download numerous proprietary documents in the few

weeks leading to his resignation. Schwartz Dec. ¶ 12. The documents McCabe pulled from the

server are largely unrelated to his job, and involve potential and realized affiliate acquisitions,

along with other highly confidential business information, including but not limited to:

 Apex’s national master Pipeline and Deal Tracker. This critical strategy document
contains details regarding hundreds of completed acquisitions and all affiliate
targets with signed letters of intent, including – at the time of access on December
21, 2023, approximately fifteen pending deals. It is so sensitive that fewer than
approximately 20 persons at Apex—total—have access to it. The document
reveals Apex’s internal valuations of businesses, the timing and national
geographic priorities of its offers and plans, the granular structuring of hundreds
of acquisitions—including the terms and the particular mix of cash, debt, and
equity used for particular types of affiliates—and the sourcing for potential
acquisitions. McCabe had zero reason justified by any Apex employment purpose
to access this document over the 2023 Christmas season.

 Pre-Letter of Intent Workbooks, which contain Apex’s diligence on specific
affiliate acquisition opportunities, including assessments of profits and losses,
labor, and, most critically, the current operations of the target business and
Apex’s internal assessment of how profitable the affiliate would be after
application of Apex’s integration methodology. McCabe accessed these
Workbooks for deals he was not working on and in markets where he was not
contributing at the time—for example, accessing Workbooks on three potential
deals in California and New York all on December 21, 2023.
10
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 10
 The 6-month 2023 Profit-and-Loss analysis for the Ridge Heating acquisition,
showing Apex’s assessment of the financial performance of a pending acquisition.

 Live Deal Datebooks and Funds Flow documents with information containing
Apex’s post-letter-of-intent diligence on potential acquisitions, which includes
confidential third-party accounting firm verifications on revenues, more
information about the specific structuring of acquisitions, and Apex’s assessment
of the prospects of the contemplated affiliate. York Dec., Ex. III.

Likewise, Apex recently learned that on March 27, 2022, about two weeks before his last

day with Apex, Hall, transmitted Apex’s proprietary information from his professional to

personal email account. The information, referred to as a “Consolidated Flash,” depicts the

financial health of the overall company with granular detail as to the revenue performance of

each of Apex’s acquired businesses. York Dec., Ex. II. The Consolidated Flash through March

26, 2022, included predictive indicators of how well Apex was performing in revenue, labor

margins, profitability, market share, and more. Schwartz Dec. ¶ 13. In the hands of a direct

competitor, this information would provide complete and total insight into Apex’s strengths,

weaknesses, and strategic plans, comprising Apex’s competitive advantage and jeopardizing its

market position. There was no legitimate business justification for this transfer—the obvious

purpose was to empower Hall to take the Apex team’s work product and replicate it for a

competitor, and to give him the exact footprint and financial detail of Apex’s operations, which

was not even necessary for him in his role. Schwartz Dec. ¶ 14.

This transmission of this information—in hard copy form, “screenshot” or photograph

form, by manual notation, or merely via Hall’s and McCabe’s verbal transmission of its

essentials—would give Legacy a tremendous competitive advantage while erasing a competitive

advantage Apex developed with thousands of hours of work and vast monetary investment. The

information would give Legacy an edge on Apex’s valuations of and offers for specific

11
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 11
acquisitions, and a detailed guide to its similar future valuations and offers. It would provide a

roadmap of Apex’s business plans, and its strategies for and assessments of particular markets.

It would provide intimate details of the “mix” that Apex uses to structure its deals for different

types of affiliates, giving Legacy the ability to undercut or distinguish future offers. And—for

some acquisitions that were contemplated but not consummated—it would give Legacy a head-

start in acquiring a competitor, or competing against Apex in the market analyzed. The

information accessed is an encyclopedia of Apex operations that could be utilized to analyze

Apex’s market strategies, identify key clients, technicians, or target acquisitions, assess profit

margins, and potentially exploit any vulnerabilities or opportunities Legacy uncovers to gain a

competitive edge or undermine Apex’s business initiatives. Schwartz Dec. ¶ 15.

Courts have repeatedly ruled that these considerations constitute legitimate business

interests rightly protected by non-competition covenants in Florida law. This is so even when—

unlike here—documents were not illicitly taken or accessed, and the confidential information at

issue is known to the former employee only through his work. In Proudfoot, for example, the

U.S. Court of Appeals for the Eleventh Circuit affirmed a judgment of the U.S. District Court for

the Southern District of Florida applying Florida law on this very point. The employee in

Proudfoot had “received information about [the employer’s] clients and business operations,

including training materials, pricing information, information about [the employer’s]

methodology for providing operational management consulting services and information about

[the employer’s] products, offerings, and tools.” Proudfoot, 576 F.3d at 1233–36. The district

court had “concluded that this information constituted ‘valuable confidential business

information’ and that ‘the confidentiality of that . . . information is at risk so long as [the

employee] is employed by [employer’s] direct competitor.’” Id. The district court had gone on to

12
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 12
“reason[] that ‘when an employee has access to confidential business information . . . , that

employer has a strong interest in enforcing a covenant not to compete.’” Id. The appellate court

agreed, emphasizing that the scope of the employer’s legitimate business interest in enforcing the

contractual non-competition covenant was not limited to confidential information that the former

employee had literally copied—instead, the confidential information he absorbed through years

of access at the company also justified the restrictions upon him:

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
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 . . . [H]e 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 Gordons employment with Highland endangered the
information that he received at Proudfoot . . . provides a basis to enforce the
competitor non-compete covenant.

Id. at 1235. See also O’Brien, 347 F. Supp. 2d at 1307 (legitimate business interest based

on the employer’s confidential information where departed employee had access to employer’s

“gross volume of used vehicle sales and detailed market analyses,” and where “AutoNation

undertakes great expense to collect and analyze information gleaned from 250 dealerships across

the country in order to implement its most profitable and efficient practices . . . would not be

inclined to share such information with a direct competitor . . . [and has thus] demonstrated that a

competitor who obtains the benefit of its confidential information would gain an unfair

competitive advantage over AutoNation in the markets in which they both operate.”).

13
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 13
As in Proudfoot and related authorities construing Florida law, McCabe’s and Hall’s

tenure as senior employees at Apex is inseparable from their long-term absorption of Apex’s

confidential and proprietary information critical to the Company’s competitive standing.

Permitting them to apply that hard-won and expensively developed confidential information to

the success of a competitor would give Legacy an unearned competitive advantage, instantly

placing it in a posture that it took Apex years to develop. For example, it has taken an investment

of years of effort and millions of dollars for Apex to develop the criteria and “playbook” by

which it identifies, assesses, and negotiates for a successful acquisition deal. That “playbook”

empowers Apex to find the right target; assess its potential profitability quickly and accurately;

and negotiate a deal with the right terms—neither too expensive to undermine profitability nor

too cheap to get the deal done. Closing the right deal with the right target can be worth hundreds

of millions of dollars over the course of a few years. Apex’s hard-won edge in doing so is critical

operational business information. Likewise, Apex has spent millions of dollars and years of

effort developing the methodology by which it turns even the “right” target into an immediately

profitable and efficient affiliate that can seize and hold a competitive advantage, thus justifying

and capitalizing on the acquisition. All of this critical business information is clearly

encompassed by the contractual definition of “confidential information” contained in the

Defendants’ agreements; “so on this breach of contract claim that is the relevant definition.”

Freedom Medical, Inc. v. Sewpersaud, No. 6:20-CV-771-RBD-GJK, 2021 WL 2808704 at *2

(M.D. Fla. May 4, 2021)(citing White v. Fort Myers Beach Fire Control Dist., 302 So. 3d 1064,

1071 (Fla. 2d DCA 2020)).

Hall and McCabe have had access to Apex’s most significant confidential business

information. They have also taken at least some of that critical information in hard copy form by

14
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 14
illicitly downloading it. They are both perfectly situated to weaponize it for the benefit of a

competitor like Legacy Service Partners. That constitutes a legitimate business interest

warranting the enforcement of their contractual covenants under Florida law.

ii. McCabe’s and Hall’s Covenants are Reasonably Necessary
to Protect Apex’s Legitimate Business Interests

To be reasonably necessary, a restrictive covenant must not be overlong or overbroad.

Balasco v. Gulf Auto Holding, Inc., 707 So. 2d 858, 859 (Fla. 2d DCA 1998) (citing Fla. Stat. §

542.335(1)(c)). McCabe’s and Hall’s non-competition covenants are limited in time, running for

a period of two years post-employment. Under Florida law, covenants lasting six months or less

are presumed to be reasonable, and covenants exceeding more than two years are presumed

unreasonable. See Fla. Stat. § 542.335(1)(d)(1). Courts applying Florida law routinely uphold

post-employment covenants of up to two years. Balasco, 707 So. 2d 858, 860 (Fla. 2d DCA

1998) (reforming three-year restrictive covenant to enforce reasonable two-year restriction); see

also State Chem. Mfg. Co. v. Lopez, 642 So. 2d 1127, 1128–29 (Fla. 3d DCA 1994) (enforcing

two-year non-competition covenant); Graphic Bus. Sys. v. Rogge, 418 So. 2d 1084, 1087 (Fla. 2d

DCA 1982) (same). Accordingly, the two-year duration of the Hall and McCabe non-compete

restrictions are reasonable under Florida law.

Furthermore, the agreements contain a provision stating:

It is the intent of restrictive covenants in this Agreement to provide The
Company a full 24 consecutive months of protection...If Employee violates any of
the restrictive covenants, Employee agrees that the restrictive covenants period
shall be extended to period of 24 consecutive months from the last date that
Employee ceases his or her violation(s), whether voluntarily or by court order.
Employee further agrees that any injunction issued shall be for a period of 24
consecutive months notwithstanding the time that has intervened since Employee
ceased being employed by the Company.

15
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 15
See Exhs A & B at ¶ 9(c)(2). Accordingly, the length of the restrictions should be

extended for both Hall and McCabe, to account for the periods they were in violation.

Hall’s and McCabe’s agreements seek only to restrict them from working for a “business

which provides activities, products, and services of the type that are competitive with the

activities, products, and services conducted, authorized, offered, or provided by the Company,

within the geographic territory or market location that Employee worked for the Company

during the two-year period prior to the end of his/her employment with the Company.” Apex

seeks to enforce these covenants only in the states in which Apex operates and which were

within the Defendants’ purview. The Defendants had insight into Apex’s central business

operations and plans throughout that territory, so restricting them from engaging in a competing

business to Apex in the areas where Apex operates is reasonable. See, e.g., O’Brien, 347 F. Supp.

2d at 1307–08. (enforcing restriction prohibiting employee “from working in any geographic

space in which [the employer] operates.”); Sentry Ins. v. Dunn, 411 So. 2d 336, 336 (Fla. 5th

DCA 1982) (enforcing two-year non-solicitation covenant without regard to the location of the

customers). This is particularly true in this specialized industry, and it does not prevent the

Defendants from seeking employment generally. See Gen. Parts Distrib. LLC v. Enright, No.

8:13-CV-2500-T-23-EAJ, 2014 WL 172116, at *5 (M.D. Fla. 2014).

b. Apex Has Suffered and Will Suffer Irreparable Injury if McCabe
and Hall are not Enjoined, and it has no adequate remedy of law.

“One of the most valuable phases of injunctions is to prevent an injury from occurring

and not to be forced to wait until after the damage is done and then attempt to seek redress for

the same.” Lewis v. Peters, 66 So. 2d 489, 491 (Fla. 1953). Irreparable injury “must be neither

remote nor speculative, but actual and imminent.” Siegel v. LePore, 234 F.3d 1163, 1176 (11th

Cir. 2000). Under Florida law, “an injury is irreparable where the damage is estimable only by
16
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 16
conjecture, and not by an accurate standard.” JonJuan Salon, Inc. v. Acosta, 922 So. 2d 1081,

1084 (Fla. 4th DCA 2006). The focus of preliminary injunctive relief is on maintaining long

standing relationships and preserving the goodwill of a company built up over the course of

years of doing business. N. Am. Prods. Corp. v. Moore, 196 F. Supp. 2d 1217, 1230–31 (M.D.

Fla. 2002). “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); Sarasota Beverage Co. v. Johnson, 551 So. 2d 503, 506 (Fla. 2d DCA 1989) (“For

purposes of a temporary injunction, irreparable injury is presumed where there is a violation of a

noncompetition agreement.”); see also America II Electronics, Inc., v. Smith, 830 So. 2d 906,

908 (Fla. 2d DCA 2002) (party seeking to enforce restrictive covenant by injunction need not

directly prove that defendant’s specific activities will cause irreparable injury if not enjoined

since a presumption of irreparable injury is created by violation of enforceable restrictive

covenant).

Hall and McCabe each acknowledged that a violation of their restrictive covenants would

result in “irreparable harm,” and consented to injunctive relief in their agreement. See Compl.,

Exhs. “A” and “B” (“Employee recognizes and understands that the Company may have no

adequate remedy at law for the breach or threatened breach by Employee of any one or more of

the promises set forth in this Agreement, and Employee agrees that any such breach would cause

irreparable harm to the Company and its business. Employee agrees that the Company may . . .

file a suit in equity to enjoin Employee from violation and breach of this Agreement.”).

The injury here is not speculative; it is already occurring. Hall and McCabe had access to

Apex’s confidential and trade secret information. They are competing in Apex’s market, in a

direct capacity, in a specialized industry, and are armed with Apex’s confidential information

17
DUANE MORRIS LLP
201 South Biscayne Boulevard ꞏ Suite 3400 ꞏ Miami ꞏ Florida 33131 ꞏTel: 305.960.2200

2/23/2024 2:44 PM Electronically Filed: Hillsborough County/13th Judicial Circuit Page 17
and trade secrets. The effect of McCabe and Hall applying Apex’s detailed strategies to advance

Legacy’s business will be a systemic undermining of Apex’s hard-won competitive advantage

and market posture—changes which cannot be undone. Schwartz Dec. ¶ 15. Notably, Apex also

has no adequate remedy at law, as this same systemic effect will make it very difficult to

determine the amount of lost profits in an action for damages. Accordingly, a preliminary

injunction is necessary here to protect Apex from suffering irreparable harm.

c. The Issuance of a Preliminary Injunction Will Serve the Public
Interest.

Under Florida law, the public has an interest in the enforcement of restrictive covenants.

Moore, 196 F. Supp. 2d at 1231-1232. Indeed, Florida Statute § 542.335, which validates much

broader restrictions, is indicative of the public’s interest in the enforcement of reasonable

restrictive covenants. The statute “sharply limits the use of the ‘contrary to public policy’

defense to enforcement of a restrictive covenant.” Id. A court may not refuse enforcement on

grounds of public policy unless the court articulates the public policy with specificity and finds

that the specified public policy requirements substantially outweigh the need to protect the

interest established by the proponent of the restriction. Fla. Stat. § 542.335(l)(i). The

enforcement of the

Case Info

Judge

Farfante, Darren. D Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

February 23, 2024

Case Filing Date

February 23, 2024

County

Parties

For full print and download access, please subscribe at https://www.trellis.law/.

Motion,Ex Parte: Apex Services Partners, LLC vs McCabe, Richard

Preview

Related Topics

Case Info

Parties