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Breach of non-compete by former officer

Plano, TX |

We suspect that a former officer of the company is in breach of his non-compete.
What can be done? a demand letter? must he admit/deny to a direct question weather or not he in breach of his agreement or can he just ignore the request all together?

Attorney Answers 3


Certainly, a demand letter or a cease-and-desist letter, would be an initial option. Sometimes, it it will put a stop to the former employee competing in violation of a non-compete; other times, they will ignore it or respond to say either they are not violating it or that they (or their lawyers) think the non-compete is not enforceable. What he does in response is really up to him as a practical matter. If he chooses to ignore or to dispute your demand, then you have to decide whether to file suit or not, including seeking temporary injunctions or restraining orders. These steps are things you would definintely want to discuss with an employment or business litigation lawyer, to see if the evidence you have have (or think you can get) will support the relief you want, to see if the non-compete is enforeceable or if there are other legal duties the former officer may have violated, and to navigate the complicated world of litigation particularly where injunctions are involved. And also, you have to consider the time and expense involved. Good luck to you.

This information is provided as a general reference based on the limited information that was provided and should not be considered legal advice. Providing this information does not create an attorney-client relationship.

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The former officer and aditional former director both resigned with intention to take over the company, they failed and I'm confident they've set up a new entity in violation on the non-compete and they are not using their own names. The new entity is probably registered and operated by unknown person to me. If they legaly can just ignore my demand letter, the only way to find out what they are doing is by filing a law suit?

Jason Edward Winford

Jason Edward Winford


During a lawsuit, they would have to respond to discovery requests by providing documents and information. But before that, you may want to do some investigation on your own---on the internet, asking around among people in the business (competitors, customers, etc.), checking various public records for any business filings, etc. An attorney can help do those things as well, particular in searching public records or hiring a reputable private investigator.


Generally, the answer is first find out whether he has or not, you can likely do that without himn admitting anything. You said you suspect, is that just a gut feeling or has someone called you with some information. Investigate. Once you know that there has been a violation, you attorney will likely want to file a Temporary Restraining Order, then a Temporary Injunction and finally a Permanent Injunction (the names might be slightly different in your state). to keep him from competing.

Understand that these lawsuits can be fairly expensive. Check Avvo for a local business litigation attorney. They should be able to give you a good idea about how much such a lawsuit is likely to cost (depending on how much they fight $10,000 to 20,000 wouldn't be out of the question, perhaps more, perhaps a LOT more depending on how serious this could be to you.

We have handled cases like that. Some are particularly difficult and others settle and usually settle quickly because everyone wants to get on with their lives and this kind of case hurts everyone, even you. Your customers do NOT want to be dragged into a lawsuit and really don't like it when "mommy and daddy" fight.

IF YOU FOUND THIS ANSWER HELPFUL PLEASE MARK IT SO. The answers provided by R. Russell O’Rourke, Attorney-at-Law as a free informational service only. Without thoroughly reviewing your case neither I nor any other attorney can give you a complete answer upon which you could or should rely. Your reading of this or any of my answers does not create an attorney client relationship between us. Legal cases are often very fact specific and need a qualified attorney to properly review ALL of your materials and fully discuss your case with you before you decide the right course of action to take. YOU SHOULD CONSULT WITH AN ATTORNEY IN PERSON who has specific expertise in the area of law you are asking about.

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The answer to your question is going to hinge on many things, not least of which, is the evidence you have of the alleged breach and the remedy you are interesting in achieving.... Mere suspicion is not going to be enough. Texas law provides for temporary restraining orders (tells the other party to stop) and limited discovery (allows you start finding out key facts and talking about things like admitting and denying same) in cases of suits upon non-compete agreements, but they are only granted by the court when the evidence indicating that the breach is sufficient enough to warrant it. Only an attorney is going to be able to review your facts and give an opinion. A reread of your non-compete is often useful too, as some provide for additional terms and guidance beyond, "thou shall not", often providing for remedies, etc. Like I said, all of this is highly dependent on many variables and you should be careful about proceeding without competent counsel. You can damage to your case by just firing off letters.

The above comments are made by an attorney at The Rieck Law Firm (RLF). RLF offers free initial consultation to potential clients and more information about this firm can be found at Materials contained within this website and submitted by this user (including the above comments) provide information on general legal issues and are not intended to provide advice on any specific legal matter. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet and online readers should not act upon this information without seeking professional counsel.

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