Getting, or Fighting, a Temporary Injunction in a Texas Non-Compete Case

Why the hearing decides the case

A non-compete lasts a year or two. A lawsuit to final judgment takes longer than that. By the time a jury could decide whether the former employee breached, the covenant has expired and the customers are wherever they are going to be. So the real contest is the temporary injunction hearing, held within weeks of filing, where a judge decides whether the employee will be restrained while the case is pending. An employer that wins it has the practical benefit of the covenant. An employee and new employer who defeat it usually have the practical benefit of the dispute being over.

This article covers the hearing itself. The steps that come before it, from confirming the covenant to the demand letter, are in how to enforce a non-compete against a former employee.

Step one: the temporary restraining order

The employer usually files its petition together with an application for a temporary restraining order. Under Texas Rule of Civil Procedure 680, a court may grant a TRO without notice to the other side only if specific facts show immediate and irreparable injury before a hearing can be held, and the order must state why it was granted without notice, define the injury and explain why it is irreparable, and state when it expires. A TRO lasts no more than 14 days unless extended once for a like period or by agreement. The order sets the temporary injunction hearing for the earliest possible date.

In practice most Dallas-area courts expect notice to the other side where it is possible, and many TRO applications in non-compete cases are heard with the former employee's lawyer on the phone. The TRO typically bars contact with listed customers and the use of company information, and orders the preservation and return of data, for the two weeks until the hearing.

Step two: what the applicant must prove

The Texas Supreme Court's decision in Butnaru v. Ford Motor Co. (2002) states the test. The applicant must plead and prove three elements:

1. A cause of action against the defendant. Breach of the covenant, breach of a confidentiality agreement, trade secret misappropriation.
2. A probable right to the relief sought. Not certainty of winning at trial, but evidence that the covenant is likely enforceable under Business and Commerce Code section 15.50 and likely breached. This is where the consideration and reasonableness questions are actually litigated.
3. A probable, imminent and irreparable injury in the interim. An injury is irreparable if the applicant cannot be adequately compensated in damages or if the damages cannot be measured by any certain pecuniary standard.

The purpose of the order is to preserve the status quo pending trial, and it is an extraordinary remedy that does not issue as a matter of right. The applicant has the burden on every element, and must present evidence rather than argument: live witnesses, declarations, documents.

Step three: the hearing

The temporary injunction hearing is a mini-trial, usually a few hours to a day, before the judge alone. The employer calls the executive who can speak to the covenant and the consideration, the sales or operations lead who can describe the customer losses, and often a forensic examiner who reviewed the employee's devices. The former employee testifies about the new role, the contacts with customers and the information taken or not taken. The new employer, if named, presents its onboarding records.

Cross-examination is where the employee side's arguments come out: no consideration was actually given, the information was not confidential, the territory and customer list in the covenant go far beyond the employee's real role, the customers called first, the company waited months before acting. Each is aimed at an element of the test or at the scope of any order.

Because Texas courts reform overbroad covenants rather than void them, the hearing often ends not with yes or no but with a narrower order than the employer requested, limited to the customers the employee actually served and the kind of work the employee actually did. The reformation rule is explained in what happens when a non-compete is too broad. An employer that asks for the tailored order from the start usually fares better than one that insists on the full text.

Step four: the bond and the order

Rule 684 requires the applicant to post a bond, in an amount the court sets, to cover the damages the enjoined party will suffer if the injunction turns out to have been wrongly granted. In a non-compete case the employee will argue for a bond reflecting lost compensation for the restricted period; the employer will argue for a lower figure, pointing to the narrow scope of the order. An injunction issued without a bond is void, so the amount is set before the order takes effect.

Rule 683 governs the order's contents. It must state the reasons for its issuance, be specific in its terms, describe in reasonable detail the acts restrained, and set the case for trial on the merits. Texas courts treat these requirements as mandatory; an order that omits the reasons or the trial setting is subject to being dissolved on appeal regardless of the merits. Both sides check the draft order carefully for this reason.

Example

Suppose a Dallas medical device distributor sues a former territory manager eleven days after she joins a competitor, alleging breach of an eighteen-month customer non-solicit. The court grants a TRO barring contact with her forty-two former accounts and sets the hearing for twelve days later. At the hearing the distributor's regional vice president testifies to the confidential pricing she received and identifies four accounts that have asked to switch suppliers since she left; a forensic examiner shows she synced her account folder to a personal cloud drive three days before resigning. She testifies that the four accounts contacted her first.

The court finds a probable right to relief on the non-solicit and the trade secret claim and finds probable irreparable injury from the loss of account relationships and the pricing data. It enjoins her from soliciting or servicing the forty-two accounts for the covenant period, orders the cloud folder deleted under the examiner's supervision, sets a bond in an amount tied to a portion of her commission income, and sets trial for the following year. Both sides have the right to appeal the order immediately; neither does, and the case settles within two months.

Step five: the interlocutory appeal

An order granting or refusing a temporary injunction can be appealed at once under Civil Practice and Remedies Code section 51.014(a)(4), without waiting for final judgment. The appeal is accelerated, and the court of appeals reviews for abuse of discretion: it asks whether the trial court had evidence supporting its ruling, not whether the appellate judges would have decided it the same way. Appeals succeed most often on the Rule 683 formalities and on orders that reach conduct the evidence did not support. The appeal does not stay the injunction unless a court orders it, so an enjoined employee remains bound while the appeal proceeds.

Fighting an injunction: the defense checklist

For a former employee and new employer served with an application, the defense is built from the same elements in reverse:

• Probable right: attack consideration (what was actually provided and when), confidentiality (how the company treated the information), and scope (the covenant versus the employee's real role).
• Irreparable injury: show that the claimed harm is a measurable sum of lost sales, that the employer waited too long for the harm to be imminent, or that the customers left for reasons unrelated to the employee.
• Scope of any order: offer the court a narrow alternative tied to actual customers and work, so that if an injunction issues it is one the employee and new employer can live with.
• Bond: present evidence of the employee's lost income during the restricted period so the bond is meaningful.
• Form: insist that any order state its reasons and set a trial date.

The hearing moves fast, the record is thin, and the judge's first impression of the parties' conduct often carries through the case. Both sides benefit from preparing the witnesses and the documents as if for trial, because for most non-compete disputes this is the trial. Tina Wysk represents employers and companies on both sides of emergency injunction proceedings in Dallas-area state courts and in the Northern District of Texas; see non-compete disputes.