How to Enforce a Non-Compete Against a Former Employee in Texas

Step one: confirm what you are enforcing

Before anything else, the company needs to know that it holds an agreement a Texas court will enforce. That means pulling the signed covenant and every later document that could modify it, and checking it against the two-part test in Business and Commerce Code section 15.50: an otherwise enforceable agreement supported by something like confidential information or training that the company actually provided, and limits on time, area and activity that match the employee's real role. The test itself is explained in is my non-compete enforceable in Texas.

This step also sets expectations about remedies. If the covenant is broader than it should be, the court will narrow it before enforcing it, and the company loses damages for the period before the court does so. Knowing that at the start shapes whether the goal is money, an injunction, or a negotiated standstill.

Step two: prove the breach, not just the departure

Leaving for a competitor is not a breach unless the covenant bars it. The company needs facts showing restricted activity: the new role, the customers being approached, the territory. Useful sources include the employee's public job announcement and professional profile, customer reports of being contacted, the departing employee's final weeks of email and file activity, and vendor or industry contacts who have seen the new pitch.

Where the employee had company devices or accounts, a forensic image of the laptop and an export of email and cloud activity should be made before IT reassigns anything. How far an employer can go in reviewing those sources is covered in investigating a departing employee's devices and accounts.

Step three: the demand letter and the notice to the new employer

Most enforcement starts with a letter to the former employee from the company's litigator. It identifies the agreement, quotes the operative restrictions, states the facts showing a breach, demands that the conduct stop by a date, and asks for written confirmation plus the return or destruction of company information. It also tells the recipient to preserve evidence.

A second letter usually goes to the new employer. Its purpose is to establish knowledge: once a company knows its new hire is bound by a covenant and keeps directing restricted work, a tortious interference claim becomes available against it. Many new employers respond by reassigning the hire or limiting the role, which may resolve the dispute without a filing. The new employer's own view of the risk is set out in hiring someone bound by a non-compete.

Letters should be accurate and measured. Overstating the covenant's reach can later support the employee's claim under section 15.51(c) that the company knowingly tried to enforce an unreasonable restraint, which can shift attorney's fees to the employer.

Step four: choose the court

A non-compete claim is a Texas state-law claim, and most are filed in the district courts of the county where the employee worked or where the agreement was to be performed, which for Dallas-area employers is usually Dallas, Collin, Denton or Tarrant County. Federal court in the Northern District of Texas becomes available when the parties are citizens of different states and the amount at stake exceeds the diversity threshold, or when the company adds a federal claim such as misappropriation under the Defend Trade Secrets Act. Federal and state courts apply the same Texas statute to the covenant itself.

Check the agreement for an arbitration clause and a forum-selection clause before filing. Many arbitration clauses carve out requests for injunctive relief so that a court can still act quickly; some do not.

Step five: file suit and seek immediate relief

If the letter does not stop the conduct, the company files a petition for breach of the covenant, often paired with claims for breach of a confidentiality agreement, breach of the duty of loyalty for conduct while still employed, and trade secret misappropriation if company data left with the employee. With the petition comes an application for a temporary restraining order, which a court can grant for up to 14 days on short notice, and a request for a temporary injunction, decided after an evidentiary hearing. What that hearing requires, and the bond the company must post, are covered in temporary injunctions in a Texas non-compete case.

After the injunction stage the case proceeds like other commercial litigation: expedited discovery of the employee's communications and the new employer's records, depositions, and either settlement or trial. In practice the temporary injunction hearing is the moment that decides most non-compete disputes, because an enjoined employee and a new employer facing an interference claim have strong reasons to settle.

Example

Suppose a commercial HVAC contractor in Fort Worth learns that its former service manager has joined a competitor and that three long-time maintenance customers canceled in the same month. His agreement bars soliciting customers he serviced in his last two years for eighteen months after leaving. The company images his returned laptop, finds that he emailed a customer contract list to a personal account the week before he resigned, and sends letters to him and to the competitor.

The competitor's lawyer answers that the manager is working only on new construction, not service accounts. The company files suit in Tarrant County district court with claims for breach of the covenant and trade secret misappropriation, and obtains a temporary restraining order barring contact with the listed customers and ordering return of the list. At the temporary injunction hearing two weeks later, the customers' cancellation emails and the forensic report carry the probable-injury element, and the court enters an injunction limited to the customers on the list through the covenant's eighteen months. The case settles on those terms with a payment for the lost accounts.

What the company can recover

Section 15.51 allows damages, injunctive relief or both for breach of an enforceable covenant. Damages are usually lost profits on diverted customers, which requires proof of causation and of the margin on the lost work; recovery of the employee's new salary is not the measure. The injunction is often the more valuable remedy because it stops the loss while it is still happening.

Two limits apply. If the court must reform an overbroad covenant, damages for the pre-reformation period are off the table and only injunctive relief remains. And attorney's fees are not awarded to the employer under the general contract fee statute for the non-compete claim: section 15.52 makes the Act's remedies exclusive, and Texas courts have read that to bar fee recovery under Civil Practice and Remedies Code chapter 38 for the covenant claim itself. Fees may still be available on companion claims, such as a trade secret claim for willful misappropriation, and under a well-drafted fee clause in the agreement when other claims are in play.

Common mistakes that weaken enforcement

• Waiting. Months of silence after learning of the breach undercut the argument that the harm is imminent and irreparable.
• Letting IT wipe and reissue the laptop before it is imaged.
• Sending a letter that threatens more than the covenant says, or that names the new employer's customers in a way that reads as interference in its business.
• Enforcing against one departing employee after ignoring three others under the same agreement.
• Contacting the customers with accusations about the former employee. Keep customer communication to the company's own offering, and let the court papers speak about the dispute.
• Treating the covenant as the whole case. A confidentiality agreement, the duty of loyalty while employed and trade secret law often supply the stronger facts, as described in what a company can do when a key employee leaves with clients.

When to bring in a litigator

At step one. The questions of whether the covenant passes section 15.50, how it will be reformed, what the letters may say, and whether a temporary restraining order is realistic all turn on judgment about Texas case law and the local courts. The company can gather the agreement, the evidence of the breach and the list of affected customers on its own; the first letter should not go out until someone has evaluated what the court will do with it. Tina Wysk represents Dallas-area employers enforcing non-competes and confidentiality agreements in state and federal court.