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The Effect Of A Party’s Delay On Its Ability To Obtain Injunctive Relief In Texas Non-Compete Cases

October 31, 2013

We are blogging on “Non-competes, Trade Secrets, Fiduciary Duties, and the Inevitable Disclosure Doctrine.” Mark Oberti has prepared a detailed paper on all of these issues, which can be found here.

Texas state courts hold that delay alone is not sufficient to bar a plaintiff from obtaining injunctive relief. As one court explained, “Texas case law does not prevent injunctive relief merely because a potential plaintiff did not file a claim as quickly as possible.” Garth v. Staktek Corp., 876 S.W.2d 545 (Tex. App.–Austin 1994, writ dism’d w.o.j.) (citing K & G Oil Tool & Serv. Co. v. G & G Fishing Tool Serv., 158 Tex. 594, 314 S.W.2d 782, 790-91 (Tex. 1958)). In K & G, laches was not a bar where the defendant in an action for an injunction and damages based on misappropriation of trade secrets argued that the plaintiff’s action, even though filed within the limitations period, should be barred by laches because the defendant continued to develop and market the product with the information the plaintiff claimed to be proprietary. 314 S.W.2d at 790-91. In another trade secrets misappropriation case, the Austin Court of Appeals followed K & G and issued the same holding. See Garth, 876 S.W.2d at 550-51. Rather, a party asserting the defense of laches must show both an unreasonable delay by the other party in asserting its rights, and harm resulting to it because of the delay. Rogers v. Ricane Enters. Inc., 772 S.W.2d 76, 80 (Tex. 1989).

Federal courts tend to take a somewhat harsher view of parties who delay seeking injunctive relief. See SafeWorks, LLC, 2009 WL 959969, at *6-7 (“In addition, SafeWorks’ delay in seeking a preliminary injunction weighs heavily against a finding of irreparable injury.”); Rimkus Consulting Group, Inc. v. Cammarata, 255 F.R.D. 417, 438-39 (S.D. Tex. 2008) (“Rimkus’s delay in seeking injunctive relief in this court weighs heavily against a finding of irreparable injury.”); Gonannies, Inc. v. Goaupair.Com, Inc., 464 F. Supp. 2d 603, 609 (N.D. Tex. 2006) (“Delay in seeking a remedy is an important factor bearing on the need for a preliminary injunction. Absent a good explanation, a substantial period of delay militates against the issuance of a preliminary injunction by demonstrating that there is no apparent urgency to the request for injunctive relief. Evidence of an undue delay in bringing suit may be sufficient to rebut the presumption of irreparable harm.”) (citation omitted).

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