Your Former Employer Sued You Over a Non-Compete, Now What?

Things are going great.  You’ve left a toxic job behind. You’re being paid more.  You’re finally advancing in your career.  People are celebrating your job announcement on LinkedIn.  Next thing you know, you receive a nastygram from your former employer and are served with papers.  Your former employer claims that you breached a non-compete

agreement or a non-solicit agreement.  They don’t want you to work. Your livelihood is now at risk. It's important to know what the process might look like.

Temporary Restraining Order

If you’ve been served with a lawsuit from a former employer, it’s important to act quickly to find an attorney.  Preserve evidence, like emails, onboarding packets, and the agreement.  Former employers frequently ask courts to issue temporary restraining orders (TRO).  To get a TRO against you, your former employer only has to convince the court that they probably have a case against you. This means that the former employer just has to show that you’re probably breaching the non-compete or non-solicit agreement and that the agreement is probably enforceable.  TRO hearings occur quickly after a lawsuit is filed, so it’s critical to reach out to an attorney as soon as you’re served.  A TRO cannot be appealed, so it’s important to be ready to fight.

The Temporary Injunction Hearing is a Chance to Fight Back

After a TRO, the court will set a hearing to decide whether to issue a temporary injunction (TI).  This hearing is like a mini trial.  Each side presents witnesses and offers evidence.  This is your chance to attack the lawsuit head-on. You want to show the court the non-compete should be unenforceable. An experienced attorney can identify reasons why the court should not enforce the agreement. Courts find non-competes unenforceable if 1) the agreement doesn’t have proper geographical limitations, 2) the agreement doesn’t have proper time limitations, and 3) if your employer didn’t give you anything of value (think specialized training, stock options, confidential information) that was meant to retain you and to protect the business.   An agreement may not have appropriate geographic restrictions if the agreement prevents you from working anywhere in Texas when the company only provided services in Dallas. If you work in an industry that changes quickly, three years may be too long to keep you out of a job.  If your employer never gave you the specialized training it promised to provide if you signed the agreement, the agreement may not be enforceable.  Showing all three, or even just one, can call your former employer’s claims in serious doubt and set the tone for the rest of the case. 

It's Time to Prepare For Trial

Trial is the final step.  There is additional time to prepare.  You and your former employer will have the opportunity to request evidence from each other and to take depositions.  Your focus is to gather evidence that builds on the defenses asserted at the earlier stages and to dig deeper into the claims your former employer presented in the previous stages.

What Can the Court Do?

At trial, the court will determine whether to enforce.  The court has a few options.  The court can enforce the agreement as written and award damages.  Enforcement typically includes injunctive relief, which means the court prevents you from doing something for a period of time.  For example, the court may decide that you can no longer work for your current employer.  If you took clients from your former employer, the court may order you to pay your former employer the profits it lost from not having the client.  The court can also decide to reform the contract.  Reformation means that the court edits the agreement to make sure that it has reasonable limitations.  For example, the court may change the agreement to prevent you from contacting customers that you directly dealt with rather than preventing all contact. If the court has to revise the agreement to make it enforceable, your employer is not entitled to damages and your former employer is only entitled to injunctive relief.  In some circumstances, you may be entitled to the attorney’s fees you spent having to defend against the case.  

Call to Learn About Your Options

If you’ve been served with a lawsuit over a non-compete agreement, you need to act fast.  It’s important to review the agreement with an attorney to assess the risks with the lawsuit.  It’s critical to get with an attorney quickly so they have time to quickly start developing the case and to appear at the TRO hearing.  An attorney can also help you handle how to deal with your current employer; it’s likely they’ve been sued, too.  Call me today to learn about your options.

*This post is for information purposes only.  The attorney is not certified by the Texas Board of Legal Specialization.  Each case is unique.  Consult with an attorney before acting.