Texas Non-Compete

Last week I had the privilege of speaking and attending the Texas Non-Compete Camp put on by UT LAW CLE and Mike Maslanka.  There were a number of great lawyers there addressing topics ranging from whether to sue the new employer of a former employee to ethical considerations of representing both the employee and employer.  Here are some items I took away from the employer’s persepctive:

  1.  Spend time considering the non-compete the employee is going to sign.  There is no one size fits all approach and if an employee can show the covenant was overlybroad the court could award them their costs and fees;
  2. The employer doesn’t always have to lead off with a lawsuit – consider pre-suit depositions if more evidence is necessary;
  3. If the employer is going to require a non-compete, also consider non-solicits, anti-raids, and confidentiality provisions;
  4. Always include venue and choice of law provisions;
  5. Consider whether arbitration or jury trial waivers make sense;
  6. Texas has adopted the Uniform Trade Secrets Act and a prevailing party in some circumstances can obtain their attorneys’ fees;
  7. There are other types of agreements that have the impact of a non-compete like stock/equity incentive plan agreements and garden leave agreements that might be considered;
  8. These types of disputes are fast, furious, and expensive;
  9. Remember that most of these disputes will never see a jury and that a judge has a great deal of discretion in temporary restraining orders and injunctions; and
  10. A party seeking a TRO will have to swear to the facts alleged – make sure whatever sworn to is accurate as it can come back to bite you.