Welcome to Texas Business Matters! This is our third blog in a ten-part series on non-competes. In our last blog, we addressed the difference between non-compete, non-solicitation, and non-disclosure agreements and how to determine if your business needs a non-compete. In this blog, we will discuss the remedies that an employer may obtain from the court when an employee violates a non-compete agreement.

Under Texas law, when an employee violates a non-compete agreement, the employer may obtain (1) injunctive relief, (2) damages, or (3) both injunctive relief and damages.

Injunctive relief is where the court orders a party to do something or to not do something. For the violation of a non-compete agreement, injunctive relief may include orders preventing the employee from working for a new employer, soliciting certain customers or employees, or disclosing trade secrets or other confidential information. Injunctive relief is often the critical remedy sought by employers where an employee has violated a non-compete agreement.

There are three types of injunctive relief. A temporary restraining order (TRO) is an emergency order that specifies what a party can and cannot do for a short period of time. In some cases, an employer may obtain a TRO against an employee without the employee’s presence in court. A temporary injunction is similar to a TRO, but it is typically designed to remain in effect until the matter is brought to trial. Finally, a permanent injunction is issued by the court after trial and is a final decision that governs the parties’ conduct in perpetuity.

Damages are often less important than injunctive relief to the enforcement of a non-compete agreement and often can be difficult to quantify. Generally, an employer should be able to recover for actual losses that the employer has sustained as a result of the employee’s violation of the non-compete agreement. Such losses may include those attributable to lost sales or customers or to the disclosure of trade secrets or other confidential information.

In our next blog, we will cover whether an independent contractor can be bound by a non-compete agreement.