Monday, March 14, 2005
An employer who breaches an employment contract by failing to appropriate money to a bonus pool cannot subsequently enforce an employee non-compete clause, even when the employee is terminated for cause, according to the Florida Court of Appeals.
Carl Domino sold his business to Northern Trust, but agreed to stay on under an employment agreement that contained a non-compete clause that would apply if he quit or were fired "for cause." The contract also required Northern to set aside $7 million for bonuses. Northern only put $4 million in the bonus pool, and Domino complained. He subsequently was fired for improper expense reports and soliciting another company employee to leave.
Northern sued for an injunction against Domino. The court held, however, that by failing to fund the bonus pool, it was not in material compliance with the contract, and one who was itself in breach could not claim the equitable remedy of an injunction.
Northern Trust Investments, N.A. v. Domino, No. 4D04-2662, 2005 Fla. App. LEXIS 2457 (4th Dist. March 2, 2005).