Protecting Your Company’s Competitive Edge

Restrictive covenants—non-compete agreements, non-solicitation clauses, and confidentiality agreements—are vital tools for safeguarding your company's strategic assets, client relationships, and market position. Drafted correctly, they shield your business from unfair competition and unauthorized disclosure of proprietary information. However, poorly constructed or overly broad restrictive covenants can quickly become unenforceable, exposing your business to vulnerabilities and expensive litigation.

Standards and litigation

Texas courts critically examine the scope and fairness of restrictive covenants. Agreements that are excessively broad or vague in their restrictions—covering unnecessarily extensive geographic regions, unreasonably long-time frames, or unduly restricting former employees' ability to earn a living—are frequently invalidated. It's essential that these covenants be thoughtfully tailored, clearly articulating the specific legitimate interests your company intends to protect.

At Hopkins Centrich, our experienced attorneys regularly advise businesses on crafting enforceable restrictive covenants and aggressively litigating breaches to protect our clients’ most critical assets and competitive advantages. Because we have experience with businesses of all types – and are business owners ourselves – we know your industry’s standards for enforceable contracts and clauses.

How Texas Law Views Restrictive Covenants

Texas law recognizes restrictive covenants as legally enforceable—but only under certain conditions. To withstand legal scrutiny, these covenants must be carefully designed and clearly justified, balancing protection for businesses with reasonable fairness to employees.

To be enforceable in Texas, restrictive covenants generally must:

  • Be reasonable in terms of geographic scope, duration, and business activity restrictions.
  • Clearly relate to protecting legitimate business interests, such as trade secrets, confidential information, and valuable customer relationships.
  • Not impose excessive or unreasonable hardship on the employee’s future employment opportunities or mobility.
  • Be supported by adequate consideration, typically tied directly to employment or additional benefits.

Texas courts also consider whether a restrictive covenant aligns with industry norms and market realities, evaluating fairness not just theoretically but practically in the real world.

Typical Breach Scenarios We Encounter

Restrictive covenant breaches come in various forms, often subtly and quickly escalating into major threats to your business. They may be hard to spot at first, then seemingly explode on you and your business. Early recognition, then, followed by swift action can mitigate damage significantly. Indeed, not taking quick action may result in you losing the opportunity to recover at all.

Common scenarios we regularly see at Hopkins Centrich include:

  • Former employees immediately soliciting your valued clients or colleagues after joining competitors.
  • Unauthorized sharing or disclosure of sensitive business strategies, proprietary technologies, or customer data to competitors.
  • Competitors knowingly hiring employees subject to restrictive covenants, openly flouting contractual obligations to gain market advantages.

A common case may go like this: a business owner discovers a former sales executive actively soliciting their major accounts within days of joining a direct competitor. A blatant breach that threatens sales and, of course, substantial financial harm if not reputational damage. Quick legal intervention results in immediate injunctive relief, effectively halting further misconduct and preserving critical client relationships.

These scenarios only highlight a few potential risks businesses face. Given human unpredictability, breaches may arise unexpectedly, making vigilance and prompt response essential.

Evidentiary Considerations in Court

Proving a restrictive covenant breach can be challenging in Texas courts. Judges require clear and compelling evidence demonstrating not only breach but also quantifiable harm directly resulting from that breach.

Key types of evidence typically considered by courts include:

  • Clearly drafted employment agreements explicitly outlining restrictive covenants.
  • Digital evidence, such as email correspondence, text messages, or documented data transfers that clearly demonstrate intentional violation.
  • Expert testimony assessing financial impact, competitive disadvantage, and damage to market position resulting from breaches.

Our attorneys meticulously gather, analyze, and present this evidence, significantly strengthening your position in both negotiations and court proceedings.

Typical Remedies

At Hopkins Centrich, we aggressively pursue robust remedies to immediately address and mitigate the effects of restrictive covenant breaches. Typical remedies include:

  • Injunctions: Swift judicial orders enforcing restrictive covenants and halting ongoing violations immediately.
  • Financial Damages: Compensation for economic losses due to unfair competition or breaches, including lost profits, damaged client relationships, and market share erosion.
  • Attorney’s Fees and Litigation Costs: Often recoverable if explicitly stated in agreements or when breaches are particularly egregious or intentional.

In some cases, courts may also award punitive damages, especially when breaches involve malicious intent or deliberate disregard for contractual obligations.

Strategic Litigation and Negotiation

Our approach at Hopkins Centrich blends aggressive litigation tactics with thoughtful negotiation strategies, always prioritizing swift and effective resolutions that align with your long-term business interests.

We initially seek immediate injunctive relief to halt ongoing breaches and prevent further harm. This strategy quickly stabilizes the situation, providing valuable leverage in negotiations. From there, we carefully assess each case individually, crafting strategic plans that balance aggressive litigation with negotiation opportunities.

Through meticulous case preparation and persuasive evidence presentation, we are frequently able to secure favorable settlements without extended litigation. However, if courtroom litigation becomes necessary, our seasoned attorneys vigorously advocate for your interests at every stage of the process.

Immediate Steps When a Breach is Suspected

Quick, decisive action is crucial when you suspect a restrictive covenant breach. Delaying action risks compounding damages, weakening your legal position, and unintentionally signaling tolerance or acceptance of the violation.

If you suspect a breach, immediately:

  • Document Violations Thoroughly: Carefully preserve all related communications, emails, texts, employment contracts, and other evidence of breach.
  • Limit Internal Discussions: Restrict conversations to essential trusted personnel to avoid inadvertent disclosure or complication of evidence.
  • Consult Experienced Counsel Immediately: Quickly engaging seasoned attorneys like Hopkins Centrich significantly enhances your ability to swiftly enforce agreements and protect your business interests effectively.
  • Conduct an Internal Review: With counsel’s guidance, promptly review internal policies and affected business relationships to clearly assess the full scope of harm and appropriate remedial measures.

Don’t Wait—Protect Your Competitive Advantage Today

If you suspect any restrictive covenant breach or anticipate potential vulnerabilities, immediate action can make the difference between minor inconvenience and devastating financial harm.

Hopkins Centrich’s skilled attorneys have extensive experience navigating the complexities of restrictive covenant disputes, ensuring immediate protection for your critical business assets and relationships. Waiting only allows problems to worsen—contact us at the first suspicion of a breach.

Protect your company’s competitive edge. Call Hopkins Centrich today for decisive legal guidance and immediate action.