Highly Compensated Former Employee Competes–But Not For Long

Mahendru, PC was successful in getting a temporary restraining order on March 22, 2012 for G.A.S. Unlimited, Inc. For over forty years, G.A.S. has provided qualified and highly skilled project personnel across various industries, including engineering, procurement, and construction; chemical; refining; exploration; pipeline; and power. In order to fill such positions, G.A.S. maintains a large proprietary database, running on a proprietary software platform.

In March, the most highly compensated employee of G.A.S. decided to leave the company and start a competing business. In doing so, he took two employees of G.A.S. with him to start his competing business. Although he was not a signatory to a noncompete agreement, the two employees he hired were subject to noncompetes. All three of them were, however, required to maintain G.A.S.’s information as confidential under agreements they signed.

When G.A.S.’s customers alerted it to solicitations the three former employees were making to do business with their new competing company, G.A.S. had move extremely quickly to seek a temporary restraining order to prevent these former employees from destroying all of the goodwill the company had spent vast amount of resources in developing.

The Harris County District Court granted the temporary restraining order, preventing the further use of G.A.S.’s confidential and proprietary information. The court also granted access to all storage devices of the former employees, including hard drives from computers. In today’s technology driven business environment, data is stored in many different places, and it can all be stored electronically. That makes finding the data that much more challenging, which is in large part why courts are routinely asked to give access to computers, hard drives, cell phones, and email accounts.

The case is still developing and a temporary injunction hearing is scheduled to convert the temporary restraining order into a more permanent injunction while the lawsuit is pending.

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