Justice Wade Birdwell
In an instructive opinion on the contours of Texas Rule of Civil Procedure 683, which governs temporary injunctions, the Fort Worth Court of Appeals has upheld a trial court’s grant of a temporary injunction to stop former employees of a real estate investment company from using its confidential information to start up a competing enterprise.
Jacob Spain, Stephen Baker, Conner Ash, and Cole Hayes v. ManPow, LLC and United InvestexUSA 28, LLC (02-24-00154-CV; May 1,2025) arose from a dispute between a company that flips residential investment property and four former employees who worked briefly at the company before quitting and forming a new firm in the same business. The company (referred to in the opinion as “New Western”) hired Spain to manage the business’s Indiana office. He signed noncompete, non-solicitation, and nondisclosure agreements with New Western, as did the other three, whom Spain retained as independent contractors. After the four split two years later, New Western filed suit, alleging that they violated their agreements by actively competing with New Western, soliciting its investors, customers, and contractors, and misappropriating its trade secrets and confidential information. New Western also alleged tortious interference and sought a temporary injunction and restraining order. The four sought interlocutory relief, arguing that the injunction failed to comply with Texas Rule of Civil Procedure 683 and the trial court abused its discretion by granting relief based on insufficient evidence.
In an opinion by Justice Birdwell, the court of appeals affirmed. Rule 683 requires that a TI order must: 1) “set forth the reasons for its issuance” and “be specific in terms,” 2) “describe in reasonable detail and not by reference to the complaint or other document, the act or acts sought to be restrained,” and 3) state exactly why an applicant would suffer injury without an injunction preserving the status quo. Defendants argued that the order specified no basis for its conclusion that they were competing with New Western nor that they had agreements with either or both of the entities. Justice Birdwell’s extended analysis of the evidence belied this argument. The evidence demonstrated that the agreements existed, that Defendants voluntarily terminated employment, and that the terms of the agreements sufficiently detailed the nature of Defendants’ breach. Defendants based much of their argument about the specificity of the agreements on the failure of the trial court’s order to make an adequate distinction between the two New Western entities. Rejecting this argument, the evidence showed that the agreements conferred third-party beneficiary status to UI 28 as an affiliated entity and that Spain’s agreement with ManPow covered his contractors as to both entities.
Defendants asserted that the evidence failed to indicate specific instances of breach. Unfortunately, the evidence included captured emails from ManPow’s confidential database and showed that Defendants marketed to those addresses. It demonstrated further that Defendants used ManPow’s “standardized playbook,” refuting Defendants’ argument that they were running a different, non-competitive business. Based on these showings, the trial court concluded, and the court of appeals agreed, that New Western established a probable right to recovery and that a TI was appropriate to preserve the status quo pending trial. The court of appeals likewise agreed with the trial court’s determination that the noncompete provisions were not overbroad.
For purposes of this article, we have significantly truncated Justice Birdwell’s thorough review and explication of the evidence (the opinion runs to 39 pages). For those of you interested in drafting and, if necessary, enforcing non-compete covenants, this opinion is for you. It pretty exhaustively lays out the evidentiary requirements for establishing entitlement to a TI pursuant to Rule 683 and how an appellate court will review Rule 683 challenges. And it’s simply an excellent example of a solid court of appeals doing it’s usual solid job.
TCJL Research Intern Satchel Williams provided research and drafting support for this article.
