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

Restrictive covenants and non-compete agreements have been a frequent subject of this weblog in current months, and rightfully so. Non-competes are typically considered efficient instruments to assist companies shield commerce secrets and techniques and aggressive benefits. Nonetheless, these agreements are falling out of favor throughout the nation – the DOJ just lately file a Assertion of Curiosity in a state court docket case taking the place that non-competes could violate the Sherman Antitrust Act. Additional, states proceed to cross legal guidelines limiting or banning the usage of noncompete agreements, together with Illinois, Oregon, Nevada, DCand Colorado.

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

The plaintiff within the case is DistributionNOW (“DNOW”), a Houston-based provider of power and industrial options, merchandise and engineered gear packages. The defendants are former staff together with Toby Eoff, the previous majority proprietor of Odessa Pumps. The criticism 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 recordsdata that contained “extremely delicate DNOW enterprise data.” Shortly thereafter, a minimum of 20 staff left their positions to hitch Permian Valve, a competitor of DNOW. Three of these staff allegedly took with them a number of paperwork containing proprietary data.

On the day DNOW sued Eoff and the opposite former DNOW staff, DNOW filed for a TRO in search of to enjoin the previous staff from disclosing or utilizing any of the proprietary data allegedly misappropriated from DNOW. The Texas Courtroom granted the TRO, which prohibits the named former staff from working for Permian Valve, and particularly prohibits Eoff from “carrying on or partaking in actions by which Eoff instantly or not directly, owns, manages, operates, controls, funds, invests in , participates in, consults with, or is in any other case linked 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 aid obtained is short-term, 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 DNOW 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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