Dallas Employment Lawyer Blog
Dallas Employment Trial Lawyer Harjeen Zibari
Despite the FTC ruling that non-competes are unenforceable, this ruling has been blocked by a judge in the Northern District of Texas and is tied up in continued litigation. Therefore, in Texas, noncompete agreements are enforceable. Read my other blog here to learn more about what makes a non-compete enforceable in Texas. Texas employers often move quickly when accusing a former worker of violating a noncompete, sometimes seeking emergency court orders that threaten your new job, your clients, and your livelihood. Understanding the process can help you protect your rights and respond strategically. Here’s what typically happens when you, the employee, are on the receiving end of a noncompete dispute in Texas.
1. The Accusation or Cease-and-Desist Letter
Most noncompete disputes (and lawsuits in general) begin with a cease-and-desist letter. This letter usually claims you’re working for a competitor, soliciting customers, or using company information in violation of your agreement. It may demand that you:
- Quit your new job
- Stop contacting certain clients
- Return documents or data
- Sign an acknowledgment of compliance
Receiving this letter does not mean the company will automatically win. It doesn’t even mean they’ll always sue you. It’s a warning—and an opportunity to assess your options with counsel. Take it seriously and meet with a lawyer immediately. Employers typically have far, far, far more resources than employees and will spend those to take someone to court.
2. Reviewing Whether the Noncompete Is Actually Enforceable
Texas law enforces noncompetes only if they meet specific requirements. So one of your first steps with an attorney is to evaluate whether the agreement is valid at all. A Texas noncompete must be:
- Tied to a valid underlying agreement (usually confidentiality, training, or stock)
- Reasonable in time, geographic scope, and work restrictions
Overly broad agreements can be reformed, meaning the court narrows them. Some are unenforceable outright. This analysis is often the foundation of your defense.
However, believing the noncompete is unenforceable alone will not prevent the employer from suing you. It just means you have a defense ready. Unfortunately, there’s nobody at the courthouse filtering out lawsuits to determine which ones are “good” or “bad.” That’s a judge’s job, and getting to the point where a judge will hear a case and decide what to do with it is costly and time consuming. The journey is only just beginning at this point.
3. Preliminary Negotiations
An employer may be open to talks about how to resolve the dispute, but this can be tricky and narrowly apply. Some solutions include offering to move to a different division at your new job that does not compete with any business at your old job. Other solutions include just showing the employer they’re totally mistaken—you’re not at the job they’ve accused you of going to, or you explicitly told that customer they’ve accused you of stealing that you cannot work with them due to your noncompete agreement. Another solution is to pay a sum of money to leave the noncompete, but usually this is a very large figure that most people cannot afford. Negotiations at this point can sometimes stop the train from leaving the station, but again, this only applies in narrow circumstances.
4. Being Served with a Lawsuit
If the dispute escalates, the employer may file a lawsuit in Texas state or federal court. When you’re served, you’ll see a petition or complaint that accuses you of violating the agreement and asks the court for:
- Monetary damages
- Injunctions stopping you from certain work
- Return of information
- Attorney’s fees
Often, the employer simultaneously seeks temporary injunctive relief, which is the fastest way to restrict your job activities.
5. Facing a Temporary Restraining Order (TRO)
Your noncompete agreement likely has language in it specifying that the employer can seek all remedies available at law, including injunctive relief. This means the employer will ask for a restraining order, which is a court order to stop you from doing something. Usually within two weeks of being served the lawsuit there will also be a hearing date for a Temporary Restraining Order (TRO). To be granted the TRO, the company must convince the judge there’s immediate harm if you aren’t restrained from doing whatever you’re doing. In essence, this means the court stops you from working. A TRO may prohibit you from:
- Working for your new employer
- Contacting certain clients
- Using confidential information
The TRO is temporary, just as the name states. They last a few weeks. However, after the TRO, the employer may ask for continued injunctive relief.
This is often a stressful situation for employees to be in, as it happens in such quick succession. This is why it’s so important to contact counsel as soon as you get the cease and desist.
6. The Temporary Injunction Hearing: The Critical Stage
The Temporary Injunction hearing is often the most consequential part of the case. Both sides present evidence, and the judge decides whether to keep restrictions in place until the final trial, which may be months away.
At this hearing, your attorney can challenge:
- The validity of the noncompete
- Whether your new job actually violates the agreement
- Whether the employer truly faces “irreparable harm”
- Whether the restrictions are broader than necessary
Winning (or even narrowing) the injunction can determine whether you get to keep working in your chosen field during the litigation. However, it does not mean the entire case is resolved at that point. The actual underlying noncompete dispute still needs to be addressed.
7. Discovery
If the case continues, both sides enter discovery, exchanging documents, taking depositions, and gathering evidence. This is the most time consuming and costly stage of any lawsuit.
This is the stage many lawsuits settle during, mostly because it is so time consuming and expensive. At this point the employer may discover some facts that weaken or strengthen its case, and you may discover the same. The judge may also order the parties attend mediation at the end of or shortly after this stage.
8. The Motion for Summary Judgment
After discovery is closed, your lawyer will likely submit a Motion for Summary Judgment, which says that there is no genuine dispute of any material facts, and that you are entitled to a judgment as a matter of law. If a judge grants a Motion for Summary Judgment, it means the case is dismissed in your favor. The judge can also grant a partial Motion for Summary Judgment, only dismissing certain elements of the claim. However, if the judge decides there are disputed material facts, the case will then be set for trial.
9. Trial
If the dispute doesn’t settle, it proceeds to trial. You can have a jury trial or a bench trial (with just the judge), depending on what the company requested when they filed the lawsuit. A noncompete trial length depends on how complicated the case is and can last anywhere from a few days to even a few weeks, for serious alleged violations.
10. Outcomes
If you lose a noncompete trial, you may be ordered to pay damages in the amount of whatever alleged business was taken away or the value of lost clients or employees. You may also be ordered to pay the company’s attorney’s fees, which, if a trial is held, will certainly be hundreds of thousands of dollars.
If the company loses (i.e., you win!), you will not be ordered to pay the company. In fact, the company may be ordered to pay your attorney’s fees, which is a safeguard intended to sway companies from filing frivolous noncompete suits.
This blog is not meant to induce panic, but to provide clarity into what is often an intimidating, confusing process. If you get that cease and desist, contact a lawyer immediately. If you want to leave a job where you signed a noncompete, discuss it with a lawyer immediately. If you’re given a noncompete to sign, go over it with a lawyer immediately. People unfortunately do not take noncompetes seriously, and they can be a massive strain on resources and one’s peace of mind.
Need to talk about your noncompete issue? Contact Rob Wiley, P.C. Dallas today or one of our talented colleagues in Houston or Austin for a consultation.