Restrictive covenants and non-compete agreements have been a frequent subject of this weblog in latest months, and rightfully so. Non-competes are typically regarded as efficient instruments to assist corporations shield commerce secrets and techniques and aggressive benefits. Nevertheless, 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 move 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 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 participating 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 workers 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 information that contained “extremely delicate DNOW enterprise data.” Shortly thereafter, at the very least 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 Court docket granted the TRO, which prohibits the named former workers from working for Permian Valve, and particularly prohibits Eoff from “carrying on or participating in actions wherein Eoff instantly 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 short-term, however it’s far reaching. It grants a non-compete treatment when there seems to be no proof of use. Actually, 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 Court docket in Fort Bend County, Texas.