Three Key Factors in Enforcing Non-Compete Agreements

What distinguishes those companies that are successful in enforcing their non-compete agreements from those that are not?  Generally speaking, just three “no-brainer” factors:

1. They have good agreements.  A non-compete enforcement lawsuit is a breach of contract case.  Thus, those companies that have good agreements – the ones that set out reasonable restrictions, are clear and unambiguous, are signed by all the necessary parties, and are supported by proper consideration – have an advantage in court.  

The courts around the country scrutinize the language of non-compete agreements before deciding whether to restrict employees’ activities based on that language.  The more vague, incomprehensible, unreasonable the restraints in the agreements are, the less the likely the courts are to order employees to comply with them. 

2. They have evidence of violations.  Suspicions, rumors, or fear that an employee might be violating a non-compete agreement are not enough to support an injunction in court.  Those companies that are successful in enforcing their non-compete agreements usually come to court with some evidence that an employee either has already violated the agreement or intends to imminently do so.  The evidence does not have to be direct, i.e., employee admitting to someone that they are violating the agreement, and it may be circumstantial, but an application to enforce  an agreement must be supported by some evidence and not just a fear or speculation.

3. They move quickly.  Those companies that are successful in enforcing their non-compete agreements do not wait around to see how far an employee will go or what s/he employee might do.  Once they have evidence of a violation, they file a lawsuit within days of obtaining such evidence.  A swift action impresses upon a judge that the business is going to suffer irreparable harm unless the court steps in and enters an order preventing an employee from violating his or her non-compete agreement.

Keep in mind that all is not lost for those companies that do not have signed non-compete agreements with their employees as employees have certain duties to their employers even in the absence of an employment contract restricting their post-employment activities. 

Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice.  His practice includes commercial, intellectual property and employment litigation.  You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108. Business Directory

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