A couple of weeks ago we wrote about the rationale behind why Texas lawyers aren’t subject to non-compete agreements. That said, generally lawyers aren’t permitted to compete with their current law firm/employer while still employed. That seems pretty basic. Imagine this fact pattern pulled from the allegations from the above lawsuit:
- Lawyer works for Law Firm A and also maintains a solo law firm (he is the only lawyer) at the same time (we’ll call that Law Firm B).
- Law Firm A doesn’t know about Law Firm B and lawyer denies the existence of Law Firm B.
- While at Law Firm A lawyer basically attempts to move business from Law Firm A to Law Firm B.
- In one instance it is alleged he interviewed a potential client for Law Firm A, but signed them up as a client for Law Firm B.
- Lawyer used the firm credit card for Law Firm B.
- Lawyer assured Law Firm A he was not operating Law Firm B.
- For other reasons, lawyer departs Law Firm A for Law Firm B.
- After his departure Law Firm A learns of the above actions.
- Law Firm A sues former lawyer and Law Firm B and seeks a TRO/Injunction and asserts claims for breach of fiduciary duty, fraud, conversion, and about every other cause of action you can think of to claim.
As part of the lawsuit Law Firm A also seeks a temporary restraining order and injunction.
While employees in Texas can prepare to compete with their employer during off hour, that does not mean an employee can compete with an employer during business hours or divert work from one company to another. I’ve actually seen this in the context of a recruiter who essentially diverted prospects to another company. Additionally, most employment agreements will have a provision that requires the employee to dedicate the majority of their time to their employer and not others. We’ll keep an eye on the case as it develops.
