Appeals

Talking about the standard an appellate court uses to review a temporary injunction in a non-compete case isn’t very exciting and we can get lost in the legalese. But it is critical to have some appreciation of what wide discretion a trial court has in Texas in addressing enforcement of a non-compete by virtue of the abuse of discretion standard.

Let’s assume your lawyer has obtained a temporary injunction restricting a former employee from competing or soliciting customers for a period of one year. The former employee appeals the ruling of the trial judge to court of appeals on an expedited basis. After all the briefs have been filed the appellate court then considers the injunction.

Under Texas law that review is limited to two issues – (1) did the trial court abuse its discretion in finding the employer showed a probable right of recovery; and (2) did the trial judge abuse its discretion in finding the employer showed immediate irreparable harm? That’s it. The law instructs the appellate court that it must affirm the trial court’s ruling if there is evidence to support its finding – it cannot substitute its judgment for the trial court even if it would make a different decision. The rationale behind this is an appellate court is not on the scene. It is not in a position to weigh the credibility of the witnesses or consider the facts of the case as a whole on an expedited basis – that is the role of the trial judge.

Whether the trial court granted or denied the temporary injunction it is very difficult to reverse its ruling. This is another reason why most non-compete disputes are resolved early on – even before the temporary injunction hearing. Once the trial court grants the temporary restraining order it is an uphill battle of the party on the other side of the ruling. What’s the takeaway for employers? The reality is the trial court judge’s ruling will be upheld and the proceedings in the trial court, not the appellate court will most likely resolve the dispute.