Obtaining Injunctive Relief Based On A Texas Non-compete Agreement (Part III)

We are blogging on “Non-competes, Trade Secrets, Fiduciary Duties, and the Inevitable Disclosure Doctrine.” Mark Oberti has prepared a detailed paper on all of these issues, which can be found here.

An injury is irreparable if the injured party cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). Because a company’s loss of goodwill, clientele, marketing techniques, and office stability are not easily assigned a dollar value, they qualify as “probable injury” for purposes of injunctive relief. Graham v. Mary Kay Inc., 25 S.W.3d 749, 753 (Tex. App.–Houston [14th Dist.] 2000, pet. denied). However, the evidence must show a probable loss of goodwill, clientele, marketing techniques, or office stability to obtain injunctive relief. See id. (holding that loss of goodwill and business stability was established by evidence that Graham actively sought Mary Kay salespersons who were willing to breach their contracts); see also Armendariz v. Mora, 526 S.W.2d 542, 543 (Tex. 1975) (holding that applicant has the burden of offering some evidence establishing probable injury); W.R. Grace & Co. – Conn, 2007 WL 1438544, at * 2 (“Although Taylor admitted that, while working for SIKA, he has had discussions with several WRG customers, there is no evidence that WRG lost sales, marketing advantage, or goodwill, or otherwise suffered an irreparable injury; or that it has no adequate remedy at law for any such violation”).

In York, 2009 WL 1840813 at *4-6 the Houston First Court of Appeals upheld the trial court’s entry of a temporary injunction against Hair Club for Men’s ex-employees and new employer under the ex-employees’ non-competition (customer non-solicitation) agreements as well as under a misappropriation of trade secrets theory. The court observed that the non-competition agreements at-issue in the case were similar to the one at issue in Mann Frankfort. Id. at *5. Likewise, in Vaughn v. Intrepid Directional Drilling Specialists, Ltd., 288 S.W.3d 931, 938 (Tex. App.–Eastland 2009, no pet.), the Eastland Court of Appeals affirmed the trial court’s issuance of an injunction to enforce non-competition agreements. The Fort Worth Court of Appeals in O’Brien v. Rattikin Title Co., NO. 2-05-238-CV, 2006 WL 417237 (Tex. App.–Fort Worth Feb. 23, 2006, pet. dis’d w.o.j.) also affirmed the trial court’s entry of a temporary injunction enforcing the terms of a non-competition agreement.

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