No Non-Compete? No Drawback. Texas Courtroom Grants TRO Forcing Former Workers to Cease Working for Competing Enterprise.

Restrictive covenants and non-compete agreements have been a frequent subject of this weblog in current months, and rightly so. Non-competitors are usually considered efficient instruments to assist companies defend commerce secrets and techniques and aggressive benefits. Nonetheless, these agreements are falling out of favor throughout the nation – the DOJ lately information a Assertion of Curiosity in a state courtroom case taking the place that non-competites might violate the Sherman Antitrust Act. Additional, states proceed to cross legal guidelines limiting or banning using noncompete agreements, together with Illinois, Oregon, Nevada, DCand Colorado.

However one Texas courtroom appears to buck this pattern. Final month, Fort Bend County District Decide J. Christian Becerra granted a short lived restraining order (“TRO”) in a commerce secret misappropriation case, forcing a number of former workers to cease work for a competing enterprise, and limiting one explicit worker from partaking in any competing work for any opponents. The catch? Not a single worker had a non-compete settlement.

The plaintiff within the case is DistributionNOW (“DNOW”), a Houston-based provider of vitality and industrial options, merchandise and engineered gear packages. The defendants are former workers together with Toby Eoff, the previous majority proprietor of Odessa Pumps. The grievance alleges that DNOW bought Odessa Pumps from Eoff for over $170 million and Eoff stayed with the corporate as a Vice President, and rose up the ranks to Govt Vice President in 2021. Then, on April 1, 2022, Eoff retired from his place and allegedly took with him a number of information that contained “extremely delicate DNOW enterprise data.” Shortly thereafter, not less than 20 workers left their positions to hitch Permian Valve, a competitor of DNOW. Three of these workers allegedly took with them a number of paperwork containing proprietary data.

On the day DNOW sued Eoff and the opposite former DNOW workers, DNOW filed for a TRO in search of to enjoin the previous workers from disclosing or utilizing any of the proprietary data allegedly misappropriated from DNOW. The Texas Courtroom granted the TRO, which prohibits the named former workers from working for Permian Valve, and particularly prohibits Eoff from “carrying on or partaking in actions wherein Eoff straight or not directly, owns, manages, operates, controls, funds, invests in , participates in, consults with, or is in any other case related to, any enterprise, particular person, partnership, agency, company or different entity which engages in any exercise that’s in direct competitors with DNOW and Odessa Pumps within the enterprise of servicing and supplying pump gear .”

The reduction obtained is non permanent, however it’s far reaching. It grants a non-compete treatment when there seems to be no proof of use. Definitely, the case bears watching. Keep tuned.

The case is DOWN LP vs. Toby Eoff et al., case quantity 22-DCV-294327, within the 434th District Courtroom in Fort Bend County, Texas.

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