Florida Appellate Court Limits Damages for Wrongful Injunction in Non-Compete Case

Under Florida law, an injunction cannot issue unless the movant first posts a bond. See Fla. R. Civ. P. 1.610(b). This week, in Vital Pharmaceuticals Inc. v. Professional Supplements, LLC, et al., Florida’s Fourth District Court of Appeal addressed a situation where the trial court did not require the movant to post a bond when it enjoined the defendants from violating their non-compete agreements. A copy of the opinion can be downloaded here.

In this case, the plaintiff sued its former employees and their new employer for tortious interference and breaching restrictive covenants. The plaintiff also sought, and obtained, an injunction, though the court did not require a bond. Later, the court dissolved the injunction for reasons unknown to the appellate court. The court awarded the defendants damages resulting from the injunction.

The appellate court reversed the damages award. The court first held that the injunction was never effective, since no bond was posted.

Next, the court ruled that any damages for a wrongful injunction are limited to the amount of the bond. So since there was no bond, the defendants were not entitled to any damages.

This case offers lessons to plaintiffs and defendants alike. If you are representing a party that has obtained an injunction in a Florida case, make sure the injunction order requires a bond — and be prepared to post the bond immediately. Similarly, both parties need to be prepared to offer evidence at the injunction hearing about the proper amount of a bond. This sometimes becomes an afterthought, with both sides focusing instead on the evidence needed to obtain/defeat the injunction.


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