Here's a detailed timeline of what typically occurs after a non-compete agreement is violated in Texas:
Responding to a Non-Compete Violation
When an employer discovers a potential non-compete violation, they generally react within 1-4 weeks, though this can be shorter if the violation poses an immediate competitive threat.
Depending on the severity of the non-compete violation and the damage being done, employers have options:
- Send a cease-and-desist letter to both the former employee and their new employer. This letter typically demands immediate compliance with the non-compete agreement and requests a response within 5-10 business days. After sending a cease-and-desist letter, a negotiation period often ensues.
- In urgent cases involving clear violations and immediate harm, an employer’s attorney may file a lawsuit and petition the court for temporary restraining order (TRO) and expedited discovery. A TRO can be granted without notice to the opposing party and sets the matter for a temporary injunction (TI) hearing within 14 days. Expedited discovery, if granted, usually takes place within 3-5 days of the order.
Employers: Act Quickly If You Suspect a Non-Compete Violation
If you believe a current or former employee is competing against you in violation of a non-compete agreement, act quickly to defend your rights. A delay could be interpreted by the courts as a lack of urgency or immediate harm caused by the non-compete violation, potentially weakening your case.
Quick action also helps prevent irreparable damage to your business. When former employees violate non-competes, they often take customer relationships, trade secrets, or proprietary information with them. Each day of delay allows them to further establish competing business relationships, eroding your position in the market. Customer relationships, once transferred, can be particularly difficult to recover.
Concerned about a non-compete violation? Contact Hendershot Cowart P.C. today to schedule a consultation with one of our experienced non-compete attorneys. Our firm has been litigating and defending non-compete claims for more than 35 years.
Sending A Cease-And-Desist Letter To Stop Non-Compete Violations
A cease-and-desist letter can be an effective first step in stopping non-compete violations in Texas. The letter is typically sent to the former employee and their new employer, and it serves to:
- Outline the specific prohibited activities
- Set clear deadlines for compliance
- Propose acceptable remedial actions
- Often prompt the new employer to take protective actions
- Invite negotiation before costly litigation becomes necessary
While a cease-and-desist letter can be an effective deterrent, it has no “teeth”. The letter is not a court order and cannot compel the employee to stop competing. During the time spent waiting for a response or attempting negotiations, the former employee can continue violating the agreement, potentially causing lasting damage to the business through lost customers, leaked confidential information, or eroded market position.
For employers facing significant competitive threats who cannot risk extended periods of unfair competition, immediate court intervention may be the better course of action.
Enforcing A Non-Compete Agreement In Texas Courts: Temporary Restraining Orders
If negotiations prompted by a cease-and-desist letter fail – or if the harm being done by the non-compete violation is severe – the next step is litigation. The employer may file a lawsuit in a Texas state court seeking injunctive relief and financial damages.
In urgent cases involving clear violations and immediate harm, employers might file for a TRO simultaneously with the lawsuit. Texas courts typically schedule TRO hearings within 24-48 hours of filing, and if granted, the TRO remains in effect for up to 14 days.
What Is A TRO?
A TRO, or temporary restraining order, is an emergency court order that provides immediate, short-term relief in non-compete cases.
A TRO prevents the former employee from continuing potentially harmful competitive activities until a full hearing can be held – usually within 14 days. It's designed to maintain the status quo and prevent immediate harm while the court considers more detailed evidence.
The Role Of Discovery In Non-Compete Litigation
During the litigation process, discovery typically takes 4-6 months, including document exchanges, depositions, and expert witness reports. When a TRO is requested, however, that process is often expedited. The employer’s attorney will generally request expedited discovery at the same time as the TRO.
In non-compete cases, expedited discovery enables employers to rapidly gather evidence of violations and potential harm while information is fresh and before further damage occurs, usually within 3-5 days of the order.
Expedited discovery in a non-compete case:
- Allows immediate access to the former employee's work devices and email accounts
- Enables quick forensic analysis of data transfers or deletions
- Facilitates rapid depositions of key witnesses
- Helps document customer communications or solicitations
- Preserves electronic evidence before it can be altered or deleted
- Supports the "irreparable harm" requirement for obtaining a temporary injunction
Temporary Injunction Process
After the initial TRO period, a temporary injunction hearing is scheduled, usually within 10-14 days. This hearing involves more detailed evidence presentation (usually collected through expedited discovery) and can last several hours or even days.
If granted, the temporary injunction remains in effect until the conclusion of trial, which typically occurs 18-24 months after the initial filing, depending on the court's docket and case complexity.
Negotiating or Mediating An End To A Non-Compete Dispute
Texas courts – especially in larger metropolitan areas – often mandate mediation around the 3-4-month mark, providing another opportunity for settlement prior to going to trial.
Negotiations may also take place after a cease-and-desist letter is sent, typically lasting 2-6 weeks, and as a precursor – or a way to avoid – litigation. During this time, your attorney will exchange information with the opposing party and try to reach an acceptable resolution that meets both sides’ reasonable objectives.
Whether during informal negotiations following a cease-and-desist letter, or as part of court-mandated mediation, following are some common compromises both sides may consider.
As a former employee, you and your attorney may propose:
- Limiting your work to specific counties or regions that don't directly compete with your former employer's core market. For example, if the original agreement covers all of Texas, you might negotiate to work only in El Paso if your former employer's primary operations are in Houston and Dallas.
- Modifications to your new role to comply with the agreement (e.g., working in product development but not sales while the agreement is in effect)
- Restrictions on soliciting specific customers (rather than prohibiting all competition) in exchange for some revenue sharing
As an employer, you might consider these potential compromises to resolve a non-compete dispute:
- Reducing a statewide restriction to specific metropolitan areas where you have significant market presence
- A graduated restriction where the employee can begin competing in certain markets after 6 months, with full competition permitted after 12 months
- Reduce an 18-month restriction to 12 months in exchange for revenue-sharing agreements for specific accounts
This negotiation phase works best when both parties recognize that it is in everyone’s interest to avoid or minimize the time spent on costly litigation. Negotiations also can be effective if the non-compete agreement may be too restrictive or broad in scope to be enforceable in Texas.
Final Resolution and Appeals
A final resolution, whether through settlement or trial, typically occurs within 12-24 months from the initial alleged violation. However, appeals can extend this timeline by an additional 7-14 months.
If a court deems the agreement broader than necessary to protect the interests of the business, the court can reform or nullify the agreement. Your attorney can review the non-compete agreement and advise of its enforceability under Texas law.
The court may also award monetary damages to compensate the employer for lost earnings and, in some cases, to compensate for attorney’s fees and court costs.
Ready To Get Help With A Texas Non-Compete Agreement?
For guidance regarding your non-compete agreement matter, contact our Houston-based non-compete litigation team to discuss the details of your case. Based on your unique circumstances, we can provide targeted legal advice, a more accurate estimate of the time involved to pursue your matter, and develop an appropriate strategy based on your needs.
