When a company believes that an employee has breached a non-compete agreement by going to work for a competitor, one remedy it can seek is a preliminary injunction. A preliminary injunction is meant to preserve the status quo in a case pending a trial on the merits. In the context of non-compete litigation, this means that an employer can file a lawsuit and quickly obtain an order barring its competitor from hiring the employee.
Getting such an injunction isn’t so easy, however, as shown by an Illinois federal court’s recent decision in Cortz, Inc. v. Doheny Enterprises, Inc.
LASIK eye surgery requires a precise surgeon. If the surgery is unsuccessful, it can result in under- or over-correction, dry eyes, or infection.
LasikPlus of Texas, a Houston eye clinic, recently found out that it should have exercised similar precision when drafting its noncompete agreements. Instead, the Fourteenth Court of Appeals ruled last week that because LasikPlus failed to include required language in its noncompete agreement, one of its doctors can open a competing clinic two miles from its front door. See LasikPlus of Texas, P.C. v. Mattioli, No. 14-12-01155-CV (Tex. Ct. App. Nov. 21, 2013). We suspect there was not a dry eye in the house after that decision.
The covenant at issue in the case was part of LasikPlus’s employment agreement with Dr. Frederico Mattioli. Under the covenant, Dr. Mattioli, for the eighteen months following termination of his employment, could not open a competing clinic within 20 miles or solicit LasikPlus’s clients. Dr. Mattioli could only terminate the agreement with 120 days’ notice, or 30 days’ notice if LasikPlus was already in breach.
In October 2012, Dr. Mattioli told LasikPlus that he would be leaving within the month to start his own practice less than two miles away. LasikPlus sued Dr. Mattioli, seeking an injunction to bar him from opening the practice. The employment agreement expressly entitled LasikPlus to an injunction in these circumstances. Further, if the covenant was deemed unreasonable in scope of time or location, other language allowed the court to reform the covenant and enforce it to the degree it would be reasonable.
Yet Dr. Mattioli still succeeded in defeating LasikPlus’s request for an injunction, because the clinic left out a critical piece of the covenant.
Engineer Milos Milosevic may have thought that he and Schlumberger Technology Corporation were like oil and water when he recently left Schlumberger, which provides services to the oil and gas industry, to work for Halliburton Company, a direct competitor. On Friday, a Texas state court said not so fast, and issued a temporary restraining order (or TRO) against Dr. Milosevic that prohibits him from starting his new job at Halliburton. The court also ordered Dr. Milosevic to “restrain from using or disclosing [Schlumberger’s] trade secrets,” and to “immediately return” any of Schlumberger’s documents or other property. Schlumberger requested the TRO at the outset of a lawsuit that it filed against Dr. Milosevic for breach of a non-compete contract and misappropriation of trade secrets.
Today’s decision of interest, U.S. Electrical Services, Inc. v. Schmidt (D. Mass. June 19, 2012), involves everyone’s favorite strip-mall stop: the Dollar Tree. James Schmidt and Peter Colon wanted to sell lighting and fixtures to the Dollar Tree (presumably for more than $1.00). Their former employer, U.S. Electrical Services (USESI), wanted to stop them, because it wanted to bid on the same Dollar Tree lighting account and it didn’t want Schmidt and Colon using its confidential pricing information to make their bid.
At the time USESI sued, the account was up for bid in only a few days. So USESI didn’t just file a complaint and seek damages. Instead, it asked for a preliminary injunction barring Schmidt, Colon, and their new employer, Munro, from competing for the business.