Employees owe a duty of loyalty to their employer and may not: (1) appropriate company trade secrets; (2) solicit away the employer’s customers while working for the employer; (3) solicit the departure of other employees while still working for the employer; (4) carry away confidential information.
What a lot of companies do not realize, however, is that if they wait too long to ask for an injunction after finding out about the employee’s competitive activities, a court may deny their request simply because they waited too long
The business world is littered with the carcasses of companies which, after they shared their confidential information and trade secrets with a non-competitor, such as their client, supplier, or vendor, were undercut by that party, who all of a sudden realized that they could profit from the information by cutting out the middle-man.
Any Texas companies that have employees who primarily work and reside in California, should update their non-compete agreements with such employees to meet the requirements of the California Labor Code Section 925.
Texas courts have issued several interesting opinions in 2017 regarding Texas non-compete law, explaining and defining when the Texas Covenants not to Compete Act applies and clarifying procedural mechanisms and remedies in non-compete disputes.
Enforcing non-compete agreements is as much of a business decision as it is a legal one. Having a non-compete agreement that is legally enforceable, allows you to decide whether it makes business sense to enforce it against a particular employee. Without a legally-enforceable non-compete agreement, however, the business reasons may not even matter.