JUST BECAUSE YOU LABEL IT A “TRADE SECRET” DOES NOT MAKE IT A “TRADE SECRET”

shutterstock_398767903Everything is a “trade secret,” right?  Nope.  What if I mark it as a “trade secret?”  Still nope.  But, you already knew those answers.  

 

This is an especially important issue when dealing with public entities, as demonstrated by the recent opinion in Raiser-DC, LLC v. B&L Service, Inc., 43 Fla. L. Weekly D145a (Fla. 4th DCA 2018).  In this case, Uber and Broward County entered into an agreement regarding Uber’s services at Fort Lauderdale airport and Port Everglades.  Per the agreement, Uber furnished monthly reports relating to the number of pickups and drop-offs, as well as information relating to the fee associated with the pickups and drop-offs.  Uber marked these reports as constituting trade secrets.  It did so to preclude this information from being disclosed to the public.

 

Yellow Cab made a public records request to Broward County relating to Uber’s trips at Fort Lauderdale airport.  Broward County responded by producing redacted records and it did not disclose the monthly reports marked as trade secrets. Yellow Cab filed a lawsuit against Broward County for violating Florida’s Public Record’s Act.  Uber intervened in the lawsuit.

 

Broward County was ultimately required to produce the monthly reports from Uber even though the reports were marked as trade secrets.  Why?

 

Florida has a public policy that public records are in fact publicSee Florida Statutes s. 119.01.   Florida’s Public Records Act is construed liberally so that the public can copy public records.  Raiser-DC, LLC, supra, citing Christy v. Palm Beach Cty. Sheriff’s Office, 698 So.2d 1365, 1366 (Fla. 4th DCA 1997). 

 

Just because a party labels a document to a public entity (such as Broward County) as constituting trade secret information does not make it so.  Stated differently, calling a document a trade secret does not in of itself make the document exempt from public disclosure.  It is not that easy.   Even the appellate court explained:  “Nothing indicates the fees or total pickups [from Uber] provide an advantage to Yellow Cab or that Uber derives independent economic value from keeping that information secret.”  Raiser-DC, LLC, supra.

 

When dealing with a public entity, it is always good practice to identify those documents you believe constitute trade secrets as confidential, trade secrets.  This way, at a minimum, you are at least preserving this right to prevent this document from being disclosed to the public.  But, again, just because you unilaterally label it as a trade secret does not mean it is not subject to challenge.  It is, and this means that the document you believe is a trade secret may not actually be a trade secret and is subject to public disclosure.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

DOES ARBITRATION APPLY TO CONTEMPORANEOUSLY EXECUTED CONTRACTS (WHEN ONE OF THE CONTRACTS DOES NOT HAVE AN ARBITRATION PROVISION)?

shutterstock_572312269Binding arbitration is an alternative to litigation.  Instead of having your dispute decided by a judge and/or jury, it is decided by an arbitrator through an arbitration process.  Arbitration, however, is a creature of contract, meaning there needs to be a contractual arbitration provision requiring the parties to arbitrate, and not litigate, their dispute.  Just like litigation, there are pros and cons to the arbitration process, oftentimes dictated by the specific facts and legal issues in the case.

 

What happens when a person executes two (or more) contemporaneous contracts, one with an arbitration provision and one without?  Are the parties required to arbitrate the dispute arising out of the contract that does not contain the arbitration provision?

 

The reality is that this has become an unnecessary over-complicated situation that should be avoided by specifically incorporating all of the contracts into an operative contract or, conversely, expressing the intent in each contract whether arbitration applies.  Being specific will avoid the over-compilation of this issue.

 

In an example of what really amounts to an over-complicated opinion regarding an arbitration provision, the case of Lowe v. Nissan of Brandon, Inc., 43 Fla. L. Weekly D103b (Fla. 2d DCA 2017) dealt with a consumer automobile transaction where a consumer challenged the sale price of an automobile.  The consumer purchased a car and signed three contemporaneous contracts: a purchase agreement, an installment sale contract (i.e., the purchase was subject to the condition that the installment contract would be accepted by a financing institution), and an arbitration agreement.  The purchase agreement incorporated the arbitration agreement.   The arbitration agreement incorporated the installment contract.  The installment contract (quite confusingly, in my opinion), however, did not incorporate the arbitration agreement or the purchase contract.

 

The consumer claimed that because the installment contract did NOT incorporate the arbitration agreement, arbitration did not apply to disputes involving the installment contract.  Notwithstanding, the trial court compelled arbitration. The appellate court affirmed.

 

The general contract principle regarding construing contemporaneously executed documents together has been reiterated in many casesSee, e.g.Dodge City, 693 So. 2d at 1035; Phoenix Motor Co., 144 So. 3d at 696 (quoting Collins, 641 So. 2d at 459). But if the parties execute ‘two separate contracts and only one contract contains an arbitration clause, the parties cannot be compelled to arbitrate disputes arising from the contract that does not call for arbitration.’ ” Phoenix Motor Co., 144 So. 3d at 696 (quoting Lee v. All Fla. Constr. Co., 662 So. 2d 365, 366 (Fla. 3d DCA 1995)). The exception is where the contract with the arbitration clause incorporates by reference the contract which does not contain an arbitration clause, such that the latter could be “interpreted as part of the [former] contract.” Id. at 697 (citing Affinity Internet, Inc. v. Consol. Credit Counseling Servs., Inc., 920 So. 2d 1286, 1288-89 (Fla. 4th DCA 2006)).

To incorporate by reference a collateral document, the incorporating document must (1) specifically provide “ ‘that it is subject to the incorporated [collateral] document’ ” and (2) the collateral document to be incorporated must be “ ‘sufficiently described or referred to in the incorporating agreement’ ” so that the intent of the parties may be ascertained. Kantner v. Boutin, 624 So. 2d 779, 781 (Fla. 4th DCA 1993) (quoting Hurwitz v. C.G.J. Corp., 168 So. 2d 84, 87 (Fla. 3d DCA 1964)). The [s]upreme [c]ourt set forth the second requirement for incorporation by reference in OBS Co. v. Pace Construction Corp., 558 So. 2d 404, 406 (Fla. 1990): “It is a generally accepted rule of contract law that, where a writing expressly refers to and sufficiently describes another document, that other document, or so much of it as is referred to, is to be interpreted as part of the writing.

Lowe, supra.

 

Here, there was no dispute regarding the contemporaneous execution of the contracts.  The appellate court found that while the installment contract did not incorporate the arbitration provision, this contract was a condition precedent to the purchase agreement.  Thus, once the installment contract was accepted by a financing institution, the purchase agreement with the arbitration provision became the operative contract without any conditions precedent. (The case actually has a more complicated legal analysis to affirm the trial court’s ruling that the parties should be compelled to arbitration).

 

In my opinion, this is nothing more than a basis to compel the parties to arbitrate when the installment contract that was sued upon did not contain an arbitration provision or incorporate the arbitration agreement or purchase agreement.  All of this could have been avoided had specificity occurred in the installment contract or had the purchase agreement specifically incorporated the installment contract.  But, if arbitration is a creature of contract, and the dealership prepared (which it did) the contracts it wanted the consumer to contemporaneously execute, compelling the parties to arbitrate based on what is perceived to be the “operative contract” seems to go against the grain that parties cannot be compelled to arbitrate disputes arising from a contract that does not contain an arbitration provision.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

HIRING SUBCONTRACTORS WITH WORKERS COMPENSATION INSURANCE

shutterstock_153987515You want to hear more on the POWER of statutory workers compensation immunity?  Well, here it is, because as I have mentioned in the past, workers compensation immunity is powerful reinforcing the importance for contractors to ensure the subcontractors they hire absolutely have workers compensation insurance.  Likewise, subcontractors want to ensure the subcontractors they hire also have workers compensation insurance.

 

In the case of Fisk Construction, Inc., v. Obando, 42 Fla. L. Weekly D2501b (Fla. 3d DCA 2017), a general contractor hired a roofer.  The roofer subcontracted a portion of its work to a sub-subcontractor.  A foreman of the sub-subcontractor than orally hired a laborer to perform a portion of the work the sub-subcontractor was responsible for performing.  The laborer got hurt and a lawsuit was filed.  The trial court ruled that the sub-subcontractor could not rely on workers compensation immunity as an affirmative defense finding that the sub-subcontractor waived and/or was estopped from asserting this defense.  There appeared to be an initial denial of workers compensation benefits that was later remedied by the sub-subcontractor’s workers compensation insurer agreeing to pay the laborer’s hospital bills and medical visits.  (Since the laborer was hired in an oral, handshake-type of deal, it could have been that executives of the sub-subcontractor had to investigate the laborer’s involvement at the project since he was not an employee of the company.)

 

On appeal, the Third District reversed holding that the sub-subcontractor could rely on workers compensation immunity as an affirmative defense.  “[A]n initial denial of liability or [workers compensation] benefits does not automatically estop an employer from asserting workers’ compensation immunity [as an affirmative defense].”  Fisk Construction, supra

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

BAD FAITH IN THE CONTEXT OF PROPERTY INSURANCE CLAIMS (WEBINAR)

Recently, I participated in a national webinar involving insurance bad faith in the property insurance context.  My section of the webinar dealt with the elements and burden of proof in demonstrating bad faith by an insurer in various jurisdictions.  If you are dealing with a property insurance claim, or believe there may have been bad faith by the insurer, make sure you are working with counsel equipped to handle the jurisdictional nuances in advising you of your rights and proving such a claim.

 

Download (PDF, 248KB)

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.