The Equity Defense
The difference between equitable claims and legal claims goes back hundreds of years when there were essentially 2 different courts depending upon the relief sought. District courts and county courts in Texas can award both equitable and legal relief. So what does that mean?
A claim for injunctive relief is equitable. Also, a claim for quantum meruit (basically an action for work done or services provided) arises in equity. In cases where injunctive relief is sought, like a non-compete case or business control case, the Courts may make equitable considerations. Put another way, courts balance the equities.
Typically individuals trying to get out of a non-compete identify numerous equitable facts in their favor: (1) they were fired; (2) the non-compete prevents them from carrying out their livelihood; (3) they didn’t take any trade secrets; and (4) they aren’t talking with their former client’s customers or employees. While these factors in and of their own right may not be sufficient to legally defeat a non-compete, the Court will certainly consider them in issuing an injunction or temporary restraining order.
Parties going into court need to be aware of whether they appear to be the good guy or the bad guy. A person that takes the customer list with him as they walk out the door generally isn’t a good guy. Neither is the employer that has a 4 year non-compete that prevents an employee from working anywhere in the world. Parties need to use common sense and think about how their respective side is going to appear to the judge.