PARAMOUNT TAX AND ACCOUNTING LLC v. BLOCK EASTERN ENTERPRISES INC (2009)

Paramount Tax and Accounting, LLC (“Paramount”) and Mary Squire appeal from an order finding them in civil contempt based upon their alleged violation of a preliminary injunction order entered against them and in favor of Squire's former employer, H & R Block Eastern Enterprises, Inc. (“Block”). Because this Court previously reversed in part and vacated in part the injunction in question (Paramount Tax & Accounting, LLC v. H & R Block Eastern Enterprises, Inc.¹ (“Paramount I ”)), we must reverse the finding of contempt.

As set forth more fully in Paramount I, supra, Block sued Paramount and Squire, asserting a breach of employment contract claim against Squire and a claim for misappropriation of trade secrets against both Squire and Paramount. Following a hearing on Block's motion for an interlocutory injunction, the trial court found that the restrictive covenants contained in Squire's employment contract with Block were enforceable, that the information contained in Block's computerized client database constituted a trade secret, and that Squire and Paramount had acted together to misappropriate that trade secret. Based on these findings, the trial court entered an order: (1) enjoining Squire from engaging in any conduct that violated the non-competition and non-solicitation covenants found in her employment contract; and (2) enjoining Squire and Paramount from performing any tax preparation work for any of the 16,000 individuals and entities listed in the Block client database for Block's Gainesville District.

Paramount and Squire appealed that order, and this Court reversed the first part of the injunction, based on our holding that the restrictive covenants in Squire's employment contract were unenforceable. Paramount I, slip op. at 14(1). We affirmed the trial court's finding that Paramount and Squire had misappropriated information from Block's client database, but nevertheless vacated the second part of the injunction because it was overly broad and therefore afforded Block “protection to which it was not entitled under the Trade Secrets Act”. Id., slip op. at 23(3).

While the appeal from the trial court's order entering the injunction was pending, the trial court held Paramount and Squire in contempt for failing to abide by the injunction. They now appeal from that order.

In light of this Court's holding that “the trial court abused its discretion in granting the interlocutory injunction as issued[,] ․ the judgment of contempt based upon [that] invalid injunction must be and is reversed.” McKinnon v. Neugent.² See also Am. Med. Security, Inc. v. Parker³ (“[b]ecause the injunction was invalid, appellants cannot be held in contempt for violating it”); Caring Hands v. Dept. of Human Resources⁴ (where court vacated injunction for being overly vague and remanded the case to the trial court, it was compelled to reverse the finding of contempt, even where it appeared defendant had willfully violated injunction).

Judgment reversed.

BLACKBURN, Presiding Judge.

ADAMS and DOYLE, JJ., concur.