October 2015

 

There is a good article from the Houston Chronicle this week outlining a non-compete dispute between two former compensation consultants and their former employer.  The facts are pretty standard fare for this type of dispute:

• professionals have some type of non-compete agreement with former employer;
• former employer finds out professionals are leaving in violation of agreements;
• former employer sues to enforce the provisions of the agreement;
• judge enters a temporary restraining order that prevents professionals from using trade secrets at new job; and
• injunction hearing will take place in two weeks.

Though the terms of the non-compete and temporary restraining order are not clear from the article we can get the gist of the lawsuit and what the trial judge will be considering going forward.  Some questions everyone should be asking:

1. Is there a true non-compete provision that prevents the professionals from working with new employer – most importantly is it likely the Judge will enforce it?
2. Did one of the professionals recruit the other professional in violation of an anti-raid provision?
3. Are there really trade secrets involved?
4. Are the professionals soliciting former employer’s clients?
5. What bad facts are out there for the professionals? Emails/Texat Messages/Dumps of confidential information through email or jump drives etc.
6. What does former employer really want in terms of an outcome?

I expect there is probably some expedited discovery going on including depositions and document exchange.  It’s likely that parties will talk about a resolution before any injunction hearing.  But the bottom line is the former employer has won the first fight and set the framework for the dispute.  Harris County is an interesting place becasue the judge that entered the TRO is not the judge that will hear the injunction hearing.  From the lawyer’s perspective this means your operating from a clean slate to some extent.