Patterson PCPatterson PC2024-03-11T17:47:00Zhttps://www.petepattersonlaw.com/feed/atom/WordPress/wp-content/uploads/sites/1303082/2022/09/cropped-patterson_pc-white_site-icon-1-1-32x32.pngOn Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2536362024-03-06T10:40:23Z2024-03-11T17:47:00Znon-compete agreements are breached all the time. When they are, you need to be prepared to take action to protect your interests. If you don’t, then you could lose your edge in the market. So, what can you do when you suspect that a former employee is in violation of their non-compete agreement? Let’s take a closer look.
Legal challenges related to non-compete agreements
If a non-compete agreement is violated, then you need to be prepared to take legal action. After gathering relevant documents, interviewing key witnesses, and preserving electronic evidence, you should be ready to seek injunctive relief. If successful here, the court will issue an order prohibiting the former employee from working for their new employer and sharing protected information.
Of course, even if you obtain injunctive relief, the damage may have been done. In these instances, you can seek compensatory damages for lost profits and malicious conduct. To support these claims, you’ll need evidence to show your losses and the behavior engaged in by the employee and their new employer.
So, when it comes to issues with non-competes, here are some challenges that many employers face:
Lack of knowledge that the non-compete is being violated.
An unwillingness to reach out to the former employee and their new employer to inform them of breach of the non-compete agreement.
Procrastination due to uncertainty over whether there’s sufficient evidence to obtain an injunction.
Haphazardly created non-compete agreements that leave loopholes for former employees and competitors to exploit.
An example of how non-compete litigation works
To see an example of how litigating a non-compete agreement can protect business interests, let’s look at one recently settled lawsuit out of the insurance world. There, an Allstate insurance agent left her employment and opened a competing insurance company less than a mile away from her former employer. The former insurance agent also allegedly took a confidential Allstate customer contact list. Both actions, according to Allstate, were in violation of a non-compete agreement signed by the insurance agent upon her employ. Allstate subsequently sent her what appears to be a cease-and-desist letter, at which time the agent moved her office out of the restricted territory. However, Allstate claims that she continued to utilize confidential information that she took from them.
During negotiations, the former agent agreed to injunctive relief, allowing Allstate to protect it customer lists and prevent the former agent from attempts to poach those customers. Allstate’s strong actions here led to a positive outcome, even without the need for full-blown litigation. This is a great example of why policing your non-compete agreements and acting quickly on violations is imperative.
Protect your interests in your non-compete agreement
A non-compete agreement can be a strong way to protect your business interests. But to successfully utilize them, you have to know how create legally valid agreements, effectively police them, and implement litigation strategies that work.]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2536342024-01-30T06:20:54Z2024-02-02T12:54:00ZWhat can you do to protect your trade secrets going into 2024?
For some businesses, protecting trade secrets seems nearly impossible. However, there are effective protection strategies that you can implement to keep your trade secrets safe. Here are a few ways to do that:
Focus on employees: Many trade secrets are leaked by current employees or disgruntled former employees. You might be able to head this off by interviewing your potential employees more carefully and requiring them to sign confidentiality agreements and, potentially, non-compete agreements.
Address collaboration: Your trade secrets might be shared if your business is working collaboratively with another company on a project. Here, you’ll want to ensure that you utilize non-disclosure agreements so that you keep your trade secrets safe, and ensure that there’s a clear understanding that secrets should only be disclosed when absolutely necessary.
Enhance security: If you can’t figure out how your trade secrets are getting out to others, then it’s going to be hard to stop it. To avoid this from happening to your business, you can implement stricter security measures, such as establishing visitor protocols, utilizing access badges, hiring overnight security, monitoring facility access, and putting a cybersecurity team in place.
There are other steps that you can take to protect your trade secrets, so make sure you’re utilizing the holistic approach you need to keep your business safe.
What about enforcement?
If your trade secrets are compromised, then you need to take legal action. By demonstrating that a trade secret was misappropriated in violation of an existing contractual agreement, you might be able to secure the following remedies:
Injunction: An injunction will prevent the party who has obtained your trade secret form using it or disclosing it any further.
Damages: If you’ve been harmed by the misappropriation of a trade secret, then you should be able to recover compensation for the damage that’s been caused to your business.
Return of the secret: When trade secrets are stolen, they’re often stored on digital devices, or they may even be captured in physical documents and photographs. In these instances, you can recover the secret itself, giving you assurance that’s it’s not floating around amongst your competitors.
How can you mitigate the risks of trade secret theft?
In addition to the strategies discussed above, there may be other opportunities for you to mitigate the risk of trade secret theft. This includes building up workplace morale and creating a culture where policies are enforced evenly and fairly. You can also utilize an exit strategy for employees who leave your business so that they fully understand their contractual obligations as they pertain to trade secrets. You’ll also want to revisit your existing policies and practices, as well as your cybersecurity protocols, so that you provide as much protection as possible.
Do you need help addressing your trade secret-related issues?
If so, then you might want to learn as much as you can about the law in this area, which might sound challenging. Fortunately, there are advocates out there who may be able to help you properly address your trade secret concerns so that you can move into 2024 confident that your best interests are as fully protected as possible.
]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2536322023-11-09T16:26:32Z2023-11-09T16:00:20ZSerious, high-stakes accusations
Patterson’s client operates a series of outpatient clinics in Texas, and the plaintiff was a former partner and co-founder. Other members of the practice bought him out in late 2018, and he claimed the buyout was far below the fair market value. He made several additional claims against the practice and its current owners:
Breach of fiduciary duty
Breach of contract
Fraud
Finding a path that works for your business
In the face of serious threat to the viability of your business, it’s critical that you find a reliable strategy. That strategy can vary with the nature of the claims, the nature of your business and your goals for the resolution. We look forward to helping you with bet the company litigation.]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2536292023-09-18T18:21:24Z2023-09-18T17:16:04Z2023 Texas Super Lawyers list. Furthermore, for the 5th consecutive year, Attorney Patterson has been nominated to the Houston Super Lawyers: Top 100 list.
Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor. Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive, and diverse listing of exceptional attorneys.
Attorney Patterson has and continues to demonstrate his abilities in many ways, earning numerous awards and legal distinctions for his advocacy as a business litigation attorney in Houston, Texas.
Additional Honors Attorney Pete Patterson has been awarded include:
Best Lawyers in America® for Litigation – Banking and Finance
AV Preeminent® Rating by Martindale-Hubbell®
National Trial Lawyers of America
Million Dollar Advocates Forum®
Multi-Million Dollar Advocates Forum®
National Register's Who's Who
EO - Entrepreneur of the Year
Please join Patterson PC in congratulating Pete Patterson on this well-earned and deserved selection.]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2535852023-08-17T15:33:30Z2023-08-17T15:16:05Z
Attorney Pete Patterson, the managing partner at Patterson PC, was recently included in the 30th edition of The Best Lawyers in America® for Litigation – Banking and Finance. Best Lawyers is widely regarded by both clients and legal professionals as a significant honor, conferred on a lawyer by their peers. Recognition is based entirely on peer review and is compiled by conducting exhaustive surveys in which leading lawyers confidentially evaluate their professional peers.
He received his undergraduate degree at the University of Texas at Austin, and earned a J.D. from the University of Houston Law Center. In 1990, he was admitted to the State Bar of Texas and subsequently qualified for:
The United States Court of Appeals, Fifth Circuit
The United States District Courts for the Northern, Southern, Eastern, and Western Districts of Texas
Multiple District Courts throughout the United States
Additional Accolades:
Mr. Patterson enjoys a coveted designation, achieving Board Certification in Civil Trial and Personal Injury Trial Law by the Texas Board of Legal Specialization. He is also the recipient of the Entrepreneur of the Year Award 2001, President's Circle Award 2003, and the 1996 PIP Award from then Governor George W. Bush.
Throughout his legal career, Mr. Patterson has secured trial verdicts in favor of his clients with verdicts valued in the tens of millions. He has also earned multiple awards and distinctions for his advocacy in business litigation through Houston and the State of Texas.
Please join Patterson PC in congratulating Pete Patterson on this coveted designation.
]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2535842023-06-28T06:49:44Z2023-07-03T06:48:31ZDamages sought in a breach of fiduciary duty lawsuit can include financial damages, equitable damages and exemplary damages.
Financial damages in a breach of fiduciary duty lawsuit
There are a variety of financial damages a litigant can pursue in a breach of fiduciary duty lawsuit. For example, the breach likely caused lost profits, and these can often be pursued. If the value of items received is more than what was originally paid, the harmed party might also have incurred out-of-pocket losses that can be sought as damages.
Equitable damages in a breach of fiduciary duty lawsuit
Not all damages simply boil down to financial compensation for losses incurred. Sometimes a party wants out of a contract due to the breach of fiduciary duty. If so, they might seek to have the contract rescinded. The harmed party might also seek an injunction to stop the breaching party from engaging in certain behaviors.
Exemplary damages in a breach of fiduciary duty lawsuit
In addition, exemplary damages -- also referred to as punitive damages -- can be sought in some cases of breach of fiduciary duty. Exemplary damages go above and beyond the monetary losses incurred by the breach. The intention of exemplary damages is to punish the breaching party.
It is important to note that in some states, exemplary damages are statutorily capped. Texas is one of these states. Still, even Texas allows parties to seek damages above the statutory limits if they can show certain factors such as misappropriation or forgery played a role in the losses suffered by breach of fiduciary duty.
Damages can compensate when a party breaches their fiduciary duty
The various damages potentially available in a breach of fiduciary duty lawsuit can be financial, equitable or exemplary in nature. All these remedies are meant to make the harmed party whole again following the breach.
]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2535772023-05-26T16:26:15Z2023-05-24T06:53:48Z
I am humbled to be awarded the Lifetime Lars Langerud Award from The Entrepreneurs’ Organization. This is the first such award by the Houston Chapter. I enjoyed speaking to the membership of more than 200 strong with my wife and son in attendance.]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2535662023-05-11T19:56:40Z2023-05-12T19:28:14Zfiduciary duty. These individuals are tasked with putting the interests of the business first, which might sound simple enough. However, there are problems with the fiduciary duty all the time, which can put a business’s financial earnings and stability at risk.
What does the fiduciary duty entail?
There are multiple aspects to the fiduciary duty. This includes:
The duty of loyalty: This duty essentially means that the fiduciary will put the interests of the business and its shareholders above their self interests. If the fiduciary stands to gain financially from a business move, then their duty of loyalty could be implicated.
The duty of care: To ensure that they’re making decisions that are best for the business, those who have a fiduciary duty are required to be diligent and informed in their decision-making. The fiduciary must truly believe that their decisions are best for the business, and those choices must be made with the same level of care that a reasonable person in the same or similar situation would have exercised.
Duty of good faith: Here, the fiduciary must avoid willful blindness and conscious disregard of matters that may be harmful to the business.
Texas courts have regularly recognized the fiduciary duty to include:
Accountability
Confidentiality
Fairness
Full disclosure
Good faith
Fidelity
Care
Loyalty
Which employees have a fiduciary duty?
A business might have a number of employees who owe the company a fiduciary duty. Amongst those who may have a fiduciary duty include corporate officers, like the company’s president and vice president, as well as directors who sit on the Board. But other executives and partners can also have a fiduciary duty. When any one of these individuals breaches their duty, a business can be significantly disadvantaged.
Other professionals and parties who have a formal fiduciary duty to their clients include agents, trustees, guardians, doctors, realtors and attorneys.
How does a breach of the fiduciary duty occur?
In many instances, the fiduciary duty is intentionally breached because the fiduciary seeks financial gain. For example, a corporate president might steer the business’s decisions to execute a contract because he benefits as a shareholder of that other company. In other instances, a fiduciary might disclose confidential information about the business in a harmful way because they’re being paid by another entity to disclose that information.
But not all breaches of the fiduciary duty are intentional. Sometimes those who have a fiduciary duty simply fail to live up to their obligations. Their dereliction of duties and willful blindness can be extremely harmful to the business, thereby rendering it unacceptable.
What should you do if you suspect that the fiduciary duty has been breached?
If you think that a fiduciary duty has been breached, then you need to investigate the matter to see if there’s evidence to support your suspicions. If you end up finding evidence of wrongdoing, then it might be time to take legal action to protect the business and your own financial interests.
Although these can be complicated matters, you shouldn’t let that deter you from taking the action that you think is best. After all, foregoing a legal claim could put you in a position that you don’t deserve and that you never expected. Therefore, it’s a good idea to fully consider your options and act on those that you think are best under your circumstances.]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2535652023-03-09T15:13:39Z2023-03-13T16:13:01Znon-disclosure agreements. In order for these agreements to be enforceable, though, you’ll have to ensure that they’re “reasonable” under Texas law, which we discussed in a previous post.
But what should you do if you suspect that a former employee is violating the terms of a non-disclosure agreement? You’ll want to take legal action as quickly as possible, which will probably include seeking a temporary restraining order, oftentimes referred to as a TRO.
What you need to know about TROs
Generally speaking, a TRO will be sought as part of pending litigation in an attempt to maintain the status quo while your lawsuit against the former employee is pending. This order restricts an individual’s behavior until the court can hear evidence to determine if a permanent injunction is warranted.
Although you can provide notice to the former employee when you seek a temporary restraining order, you can obtain one of these orders ex parte.
In order to do so, you’ll have to submit a verified petition that alleges facts sufficient to support the request. If the court grants your request, then the matter will be set for a hearing in short order to determine if the restraining order should continue.
There may be other requirements that you have to fulfill when you seek one of these restraining orders. For example, you may have to post a bond meant to protect the former employee in the event that they’re harmed by the restraining order.
What do you need to show?
In order to obtain a TRO, you’ll have to show that money alone is insufficient to compensate you for the harm that’ll befall you if the former employee discloses confidential information. This typically means that you’ll have to demonstrate that you’ll suffer permanent and irreparable harm if the TRO isn’t granted.
This means that you’ll have to look to factors other than economic motivators to justify your request for a TRO. This might include the release of trade secrets, the fraudulent use of intellectual property, or some other harm to your business’s reputation.
What are your next steps after obtaining a TRO?
After obtaining a TRO, you’ll have to have a hearing on the matter to determine if the order should become an injunction while your lawsuit plays out. That said, you’ll have to file a lawsuit in order to maintain the protection that you’ve been granted by the court.
Therefore, you’ll want to make sure you have a strong basis for taking legal action against your former employee. This should be pretty easy to tell given that it’ll most likely be a clear violation of a written and signed agreement, but these cases can be fraught with legal nuances that can challenge your position.
Don’t get caught flat-footed when time matters
That’s why you might want to carefully think through your legal strategy as you prepare to litigate these matters and seek a TRO and a subsequent injunction. And time is of the essence here, too. Therefore, you might want to get a legal ally on your side who is ready to quickly and aggressively advocate to protect your business.
We know you have a lot of options in that regard, but not all business litigation teams are created the same. That’s why we’d encourage you to research those firms that are enticing to you so that you can choose the representation that’s best for you and your business.]]>On Behalf of Patterson PChttps://www.petepattersonlaw.com/?p=2535622023-02-09T19:58:22Z2023-01-20T07:39:14ZAre non-compete agreements legal in Texas?
Yes. Businesses can use non-compete agreements. However, in order for these agreements to be legally valid and enforceable, they have to meet certain criteria. This includes showing that the agreement was tailored in a way that did not restrict the employee any more than necessary to protect the business’s interests and that the agreement was reasonable in geographic and temporal scope. The agreement must also be reasonable in the restrictions that it places on the employee’s actions once they leave the business's employ.
With that said, Texas courts tend to disfavor non-compete agreements and many do not hold up in litigation for a variety of reasons, such as unreasonable scope, time or restrictions. Just because a non-compete agreement is in place does not mean it will offer businesses the protections they think they will receive, nor does it mean that employees are restricted in the way they think they may be restricted.
What is “reasonable”?
When looking at geographic limitations, a court will consider a few key facts. First, it will consider where the employee worked and had contact with customers and business partners. Then, the court will assess where the business conducted its operations and how it carried out its tasks.
It's important to remember that the court’s goal here is to determine if the terms of the agreement adequately protect the business’s interests without unnecessarily restricting the employee post-employment. For this reason, courts typically limit the geographic scope to the area where the employee worked rather than where the employer conducted business.
This same sort of analysis applies to temporal and activity-based restrictions that are placed in a non-compete agreement. Overly broad terms related to activity or time restrictions may render an agreement unenforceable.
What if a non-compete is disputed?
For both businesses attempting to enforce a non-compete agreement and employees attempting to challenge alleged non-compete violations, the success of the case will likely hinge on the wording of the agreement and:
The employee’s work tasks
Tasks performed for the new employer
Trade secrets or other business interests that the business seeks to protect
The impact that premature disclosure of the business's protected interests can cause
Are you ready to take legal action?
If you’re dealing with a legal issue related to a non-compete agreement, you need to be prepared to zealously advocate for your position. That might be stressful to think about, but that’s where legal assistance can come into play.
If you want to learn more about what a business litigation advocate can do for you in your situation, you may want to discuss your circumstances with an attorney. While you have a lot of options when it comes to representation, not all legal teams are created equally. That’s why you should do your homework and research the firms that interest you so that you can pick the advocate who is right for you.]]>