Chapter § 10-4 Most Common Mistakes

• Jurisdiction: United States

10-4 Most Common Mistakes

• Failing to manage your client's expectations. Again, be realistic about the relief you can get given the facts. Also, be realistic about your fees, especially in anticipating counterclaims. Finally, never promise your client that you can get fees if you successfully obtain injunctive relief.
• Failing to properly preserve digital evidence and electronically stored information.
• Failing to authenticate digital evidence.
• Failing to seek reformation of any overly broad agreement and/or failing to do so during the restriction period. This is especially true if you drafted the underlying agreement and the law has changed in the interim.
• Failing to seek an equitable extension of the restrictions during the restriction period.
• Failing to properly limit and define your proposed injunction. This is especially important when using catchall language like "and otherwise comply with the terms and conditions of the Party's agreement." Even if you carefully limit the restrictions in your proposed injunction, if you incorporate overly broad terms from the underlying agreement, then the injunction is subject to attack and the defendant may be able to get his/her fees. Do not overreach.
• Seeking an injunctive relief without some sort of evidence of continued breach. If you do not have that evidence, then you should ask for a Rule 202 deposition and discovery.
• Failing to involve the departing employee's new employer in your initial discussions—remember, at least one Texas court held that the new employer is a necessary party to any injunctive relief.
• Relying on a defective anti-waiver provision in the agreement. Always act quickly. If you don't, then a court probably will not be convinced the issue is important enough for injunctive relief.
• Failing to obtain contact information for service of process until after the injunction is issued.
• Failing to comply with the local rules concerning injunctive relief.
• Failing to properly verify a request for a temporary injunction or drafting a verification that will expose the witness at cross-examination. Make sure whoever verifies your request has sufficient personal knowledge.

Cause No. __________

XYZ COMPANY

v.

JANE DOE

IN THE DISTRICT COURT OF DALLAS COUNTY, TEXAS

___ JUDICIAL DISTRICT

PLAINTIFF'S ORIGINAL PETITION & APPLICATION FOR TEMPORARY RESTRAINING ORDER AND TEMPORARY INJUNCTION

Plaintiff XYZ Company. ("XYZ") files this Original Petition & Application for Temporary Restraining Order and Temporary Injunction as follows:

XYZ Company moves to restrain Jane Doe, a former sales Account Executive, from breaking her agreement not to:

• disclose or use XYZ Company's confidential information other than for the sole benefit of XYZ Company;
• compete with XYZ Company within fifty miles of the DFW metropolitan area for twenty-four months following the end of her employment; and¹
• solicit certain customers and potential customers with whom she did business at XYZ Company for twenty-four months following the end of her employment.

On or about October 8, 2013, Jane Doe voluntarily resigned her employment with XYZ Company. When asked if she was going to remain in [the industry], Jane Doe replied that she did not know what she was going to do. Prior to her departure, though, Jane Doe retained information concerning XYZ Company's customers, including customer information that she had emailed to a personal Yahoo email account shortly before she resigned.

Thereafter, Jane Doe became employed by [corporation], a direct competitor of XYZ Company, and has sales responsibilities the same or similar to her responsibilities at XYZ Company. Since becoming employed by [corporation], Jane Doe has used the confidential customer information which she had retained from her employment with XYZ Company and solicited certain customers and potential customers with whom she worked at XYZ Company. XYZ Company also recently learned through a forensic examination of Jane Doe's XYZ Company computer that she had communicated with [corporation] multiple times beginning over a month before her October 8, 2013 resignation.

1. Jane Doe conducts business nationwide—not just in the DFW metropolitan area. Therefore, Jane Doe can still compete with XYZ Company in FF&E sales as long as: (a) that competition is outside of her restricted territory, and (b) Jane Doe does not solicit specific customers pursuant to her non-solicitation agreement.

I. SUMMARY

XYZ Company now seeks to enforce Jane Doe's non-disclosure, non-compete, and non-solicitation agreements and to protect its confidential information and business goodwill.

II. DISCOVERY PLAN

1. Subject to XYZ Company's request for a pre-temporary injunction hearing discovery as set forth below, XYZ Company requests that discovery be conducted in accordance with a Level 3 Discovery Control Plan pursuant to Tex. R. Civ. P. 190.4.

III. PARTIES

2. XYZ Company, a [state] corporation, is a national provider of [product].

3. Defendant Jane Doe, an individual, is a Texas resident and may be served with process at her residence, __________, or wherever she may be found.

4. XYZ Company and Jane Doe are sometimes collectively referred to herein as the "Parties."

IV. JURISDICTION & VENUE

5. The Court has subject matter jurisdiction to grant all relief requested herein, and the amount in controversy is within the jurisdictional limits of this court. XYZ Company's claims for injunctive relief are brought pursuant to Tex. R. Civ. P. 680-693 and Tex. Civ. Prac. & Rem. Code §§ 65.001-65.045.

6. Venue is proper in __________ County pursuant to Texas Civil Practices and Remedies Code § 15.001, et seq., because a substantial part of the events or omissions giving rise to XYZ Company's claims occurred in __________ County. Additionally, Jane Doe was a resident of and worked in Dallas County at the time XYZ Company's claims accrued.

7. XYZ Company fully references and incorporates the remainder of the factual allegations in this Petition in support of venue in __________ County, Texas.

V. FACTUAL BACKGROUND

A. XYZ Company Maintains Confidential Customer Information in Its Database

8. XYZ Company provides [insert service]. Its comprehensive approach to managing numerous [projects] over the years, its reputation for superior service, and its longstanding business goodwill all help to distinguish XYZ Company above and beyond its many competitors in the industry. Its success is built on customer trust, its business goodwill, and customer satisfaction earned over time.

9. To achieve this success, XYZ Company has spent significant time and resources in developing and maintaining information regarding its customers and related services, potential new sources of customers and business, and the expansion of its current business. This includes the following information, which is kept in its internal database ("Company Web" or "Company Intranet") and/or conveyed via email internally or outside as part of its business:

• customer records, including preferences, history of projects for each customer, history of bids that were unsuccessful in securing projects, customer profiles, the identity and specific contact information of historical customer decision makers and influencers;
• bid and project specifications and related negotiations;
• customer quotes and bids, including drafts and revisions of customer quotes and/or bids;
• sales leads and customer prospects concerning new business from new customer and concerning new business from existing customers;
• pricing information, including XYZ Company's revenues, costs, and profit margins for its bid projects and for servicing the account through the life of a project; and,
• vendor pricing information, including specially negotiated pricing.

XYZ Company gathered, compiled, and analyzed this information over the past several years at significant expense. Again, this information is kept in the Company Intranet and/or conveyed via email internally or outside as part of its business. The substantial majority of this information is unavailable to and unknown by the general public or XYZ Company's competitors, and XYZ Company considers it confidential and proprietary. XYZ Company uses its confidential information to gain advantages, or have the opportunity to gain advantages, over its competitors.

10. XYZ Company has taken substantial measures and exercised due diligence to prevent its confidential information from becoming available to persons other than those it authorizes in order to further its business. For example, XYZ Company requires employees with access to confidential information to sign non-disclosure agreements as well as taking other digital and physical security measures to protect this information.

B. Jane Doe's Employment With XYZ Company

11. Jane Doe was employed as an XYZ Company sales Account Executive in Dallas. Her primary responsibilities included marketing and selling floor coverings, linens, bedding, window treatments, seating, case goods, and other services to customers and potential customers throughout Texas and beyond. She was also responsible for maintaining and improving XYZ Company's existing customer relationships and enhancing its business goodwill by, among other things, providing superior service throughout the life of a customer bid, from the pre-quote stage through project completion. She performed these duties throughout Texas and nationwide.

12. Although she serviced specific customers and potential customers outside of this area, Jane Doe's primary sales territory while at XYZ Company was Dallas-Ft. Worth and the surrounding counties up to a fifty-mile radius from the DFW metropolitan area.

C. Jane Doe Agreed to Non-Disclosure, Noncompete, and Customer Non-Solicitation Restrictions

13. As a condition of her employment and providing her with access to its confidential information and business goodwill, Jane Doe entered into an Employment Agreement with XYZ Company on July 1, 2013. See...