5 Injunction Non-Compete Lessons

Originally published by Rob Radcliff.

For the last few months I’ve been involved in a number of temporary restraining order/preliminary injunction cases in state and federal courts in a number of different industries/professions. Some general reminders/lessons from non-compete/non-solicit fights:

1. Signed Agreements – Make sure the non-compete agreements at issue are signed.  Some companies have their employees execute agreements on line and there is an electronic signature.  How is that going to be proved up in litigation? (Usually, there is an electronic signature document that the company has.)   Obviously, a written signature is easier to use but not always available these days.
2. Consistent Agreements – Often times agreements may be old or prepared by a predecessor company.  Make sure they are consistent.  Look at the key terms here – choice of law, venue, non-solicit, non-compete etc. etc.  Unforuntately, these types of agreements are sometimes only reviewed at the outset of a lawsuit.
3. Choose venue wisely – Sometimes the agreement itself may dictate where a suit is filed (hopefully it does).  If not, where should the suit be filed?  What state? (where is the employee located/where is the company located)  State or federal court?
4. Evidence – In some cases the company may have evidence of “bad things” the former employee did or is doing.  This may range from using the former company’s proprietary information to contacting clients/customers.  In some cases the company may only know that the former employee is working for a competitor and that’s it.  So how do you get the evidence necessary to support a TRO or preliminary injunction?  In Texas the pre-suit deposition may be an option or a motion for expedited discovery requesting documents and depositions.  The point is strong evdience is necessary to support an injunction.
5. Resolution – Most post-employment covenant cases that are resolved by settlement do not inolve the employee ending his/her employment with their new company.  Most of these cases are resolved by a non-solicit agreement.  What do I mean?  An employee and their new company (in most instances) is not going to simply agree that the new employee will no longer work for the new company.  That type of relief is difficult to get and most defendants are willing to go the distance on the non-compete issues.  The fertile ground for this type of resolution is defining the customers/clients the former employee will not contact and ensuring they are not using proprietary information.

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