Many employers who have multistate operations know that the enforceability of a restrictive covenant depends largely on the state in question. While obviously no state will rubber stamp whatever restrictive covenant an employer can think up, even a properly structured and reasonable covenant – which would be enforced without question in most of the country – may not get any traction in some states.
possessing, disclosing to any third party, or using for their own benefit or to the detriment of Ignite and Stream Energy any of Ignite’s or Stream Energy’s Proprietary Information/Trade Secrets ( including but not limited to proprietary information , confidential information, training materials, templates, or sales or customer lists).And, during the injunction hearing, the trial judge had defined “Proprietary Information/Trade Secrets” to be “valuable business, training, and sales techniques, methods, forms, materials, guides, lists, downline associate and customer lists, including personal identifying information, and other confidential and proprietary information as discussed above.” The Court of Appeals found that the this language was too broad and general, and particularly the references to “techniques,” “materials” and other “confidential and proprietary information” because these terms could encompass many different things and did not give enough specificity to the appellants to know what exactly they were restrained from doing. Many employers use similar generic “catch-all” language-- based on the theory that more general terminology will allow more flexibility when it comes to enforcement. Then, when litigation occurs, that same language typically is adopted by the company’s attorneys and set forth in the company’s request for injunctive relief in court. Based on this latest decision, employers who seek to prosecute violations of restrictive covenants in Texas need to be specific about what they want to have limited, not only in their agreements, but in what they ask the courts to do . At the end of the day, a restrictive covenant is only as good as the injunction actually enforcing it.