I often hear from employees who are bound by non-compete agreements that "Texas is a right to work state," and that, therefore, their agreements are unenforceable. Not true. The "right to work" concept has NOTHING to do with non-compete agreements. Rather, the "right to work" concept has to do with the right of employees to decide for themselves whether...
Continue ReadingCompany X’s employee (who is bound by a non-compete agreement) resigns and begins working for Company Y (a competitor of Company X). Company X sues its former employee for violating his non-compete. Months later, they reach a settlement, and a final judgment is entered. Company X can then sue Company Y for tortiously interfering with the non-compete agreement between...
Continue ReadingIncreasingly, America’s economic preeminence in the world is challenged by other nations, including most notably China. In some cases, "economic espionage" is alleged when American trade secrets are taken abroad. Here’s an interesting story about DuPont’s trade secrets that were taken in the U.S. and, it was believed, bound for China: http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20070302/NEWS/703020363/-1/NEWS01 www.mylawteam.com
Continue ReadingTo get an injunction restraining former employees from competing, an employer needs a valid non-compete agreement or a misappropriation of trade secrets claim, right? Wrong. A breach of fiduciary duty (duty of loyalty) can also warrant injunctive relief. In a case decided several years ago, two employees worked for a company (“the Corporation”) that was involved in the institutional...
Continue ReadingAnother quick hit on the ramifications of Sheshenoff. In recent years, employers have not infrequently added to their non-compete agreements a promise to convey confidential information to the employee, even if the employee no longer worked for the employer when the information was conveyed. The purpose of this was to address the employee’s argument that, "Because I’m an at-will...
Continue ReadingThe elements for misappropriation of trade secrets under Texas law are well known. A plaintiff must establish that: (a) a trade secret existed; (b) the trade secret was acquired through a breach of a confidential relationship or was discovered by improper means; (c) the defendant used the trade secret without the plaintiff’s authorization; and (d) the plaintiff suffered damages...
Continue ReadingIn tortious interference with contract (or prospective business relations) cases, plaintiffs often contend that their contracts with customers—or employees—have been unlawfully interfered with. In many situations, the contract alleged to have been interfered with is an “at-will” contract (i.e., it is a contract that can be canceled by either party at any time, for any reason). An at-will employment...
Continue ReadingAn employee may be liable for breach of fiduciary duty to his employer—even if his employer suffers no actual damages as a result of the offending conduct. So learned an employee in a recent case. In that case, the employee, a Project Manager for a general construction contractor, was responsible for locating potential subcontractors for the project, soliciting bids...
Continue ReadingIn a recent case, the employer’s consideration in exchange for the employee’s promise not to compete was set forth in the following provision: Employer hereby agrees to provide to Employee any specialized training necessary, in the opinion of Employer, to allow Employee to conduct the duties of employment with Employer. Employer further agrees to provide to Employee any...
Continue ReadingOne of the most frequently-litigated issues involving noncompete agreements is whether the consideration given by the employer was adequate. There are generally two parts to the inquiry: one, whether the consideration given was real (i.e., not “illusory”); and two, whether the consideration given justified the noncompete agreement in question. Giving a definite term of employment satisfies the first requirement,...
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