Getting Out of the Way of A Settlement

Originally published by Rob Radcliff.

 

Non-compete cases that are well lawyered should be resolved early in the litigation process.  Why do I say that?  If the plaintiff is an aggressive former employer it will in most instances move for a temporary restraining order followed by an application for a temporary injunction in Texas state court.  In that process a lot of things can happen.  First, the parties will have appeared before a judge and gotten a flavor for how the judge will rule and what the judge thinks of each parties’ claims and defenses.  Second, there may be expedited discovery including document productions and depositions.  The judge may even order the case to mediation to avoid having to spend court time on a temporary injunction hearing – which is like a mini-trial.

Most importantly, both side will incur attorneys’ fees and in many cases a lot of them in short amount of time.  Injunction cases and expedited discovery are not cheap.  It all takes place up front and the client is likely to receive one large bill.  Point is they will have a flavor for the costs and will see more fees on the horizon.

By the end of all this the parties should know all the bad things the other side has done and merit of their claims and defenses.  Couple this with overall litigation fatigue (caused by time expended on the case and attorneys’ fees) and there is usually a good opportunity to have a settlement dialogue and get the case resolved.

What if that doesn’t happen?  What if the case just sits there, the plaintiff doesn’t seek an injunction or press for discovery, and there is no end in sight?  I had this happen on a case recently.  A year into the lawsuit, the case wasn’t moving a long, we were just starting depositions, and mediation was a long way away.  Then it happened – during the break in a deposition the two key players were left in the room together while the lawyers talked outside.  During the middle of attorney discussions I started to hear some heated argument – but it was good heated argument.  After months of the case going no where, the players were venting towards one another.  The attorneys went in to break it up but the players still wanted to talk.  We agreed everything was a settlement discussion cloaked in privilege and we left the players in the room to continue.  There were a few times we had to calm the sides down but that emotional venting had to happen.  Finally, they reached terms.  The lawyers papered the settlement and the case was over.

The point of all this is the parties always need to be looking to an exit ramp from the litigation highway.  You just have to be willing to take the exit even if means leaving two people in the same room who are upset with each other.  This won’t always work but it’s been my experience that there is nothing better than good, frank discussion.

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