HBC Obtains Denial of Temporary Restraining Order in Employment Non-Compete Case

Harper Bates & Champion partner Austin Champion and associate Dale Fresch recently obtained a denial of a temporary restraining order in the Northern District of Georgia in an employment case involving two security services companies and an executive who worked for both.

Champion and Fresch were defending the Texas-based employee in a breach of contract case brought by the man's former employer, a Georgia-based company that alleged the man's departure from the company after 15 years to work for a competitor violated a non-competition clause in his employment agreement. The former employer also alleged that the executive had lured away several of its customers and employees to his new company in violation of non-solicitation provisions in that same agreement. Seeking to apply Georgia law to the employment agreement, the plaintiff moved for the issuance of a temporary restraining order prohibiting the defendant from working for his new employer or any security services company within a hundred miles of the Dallas-Fort Worth area for the next two years.

In response, Harper Bates & Champion argued that Texas law should apply to the threshold question of whether an agreement—entered into by a Texas resident in the State of Texas—fails for lack of consideration. Under Texas law, an employer cannot add new, material provisions to an employment contract without providing additional consideration to the employee. Importantly, that new consideration cannot be a promise of continued employment, which is considered an illusory promise under Texas law.

Champion and Fresch also argued that the plaintiff had failed to offer sufficient evidence of alleged breach, falling short of the high threshold required for entry of a TRO.

The court agreed, concluding the plaintiff had failed to carry its burden of showing that the defendant had likely violated his employment agreement. The court also concluded that the potential harm to the defendant from a temporary restraining order would far outweigh any harm to the plaintiff in the absence of such an order. As a result, the court denied the plaintiff's motion for a TRO.

About Harper Bates & Champion

Harper Bates & Champion LLP is a law firm in Dallas, Texas, devoted to complex business litigation, intellectual property litigation and intellectual property prosecution. The firm works closely with Fortune 100 companies, privately held businesses and individuals to resolve business and intellectual property disputes and obtain intellectual property rights. The Firm's attorneys have been recognized as Texas Super Lawyers, Texas Rising Stars and among the Best Lawyers in Dallas. The firm's attorneys have appeared before trial and appellate courts throughout the country, the International Trade Commission, the Trademark Trial and Appeal Board, the Patent Trial and Appeal Board, and the United States Patent and Trademark Office. To contact Harper Bates & Champion, call 214-238-8400, or visit www.harperbates.com.