Texas Judge Grants TRO Against Dairy Executive’s Employment with Rival Company Due to Noncompete Agreement

Austin Oil and Gas Attorney, Gregory D. Jordan

Austin, TX (Law Firm Newswire) January 29, 2018 – A Texas judge granted a temporary restraining order preventing a food and beverage company executive from working for a rival dairy company, based on alleged violation of a noncompetition agreement.

Dean Foods alleged that Brett Johnson, its former vice president of operations, was likely to contact former customers and disclose trade secrets in violation of a noncompetition, nonsolicitation and nondisclosure agreement he signed. Judge Jim Jordan blocked Dairy Farmers of America (DFA) from employing Johnson and set a hearing on the request for a temporary injunction filed by Dean Foods.

“Under Texas law, a covenant not to compete must be ancillary to an otherwise enforceable agreement and reasonable in terms of time, geographical area and scope of activity to be restrained,” said Gregory D. Jordan, an Austin, Texas employment attorney with the Law Offices of Gregory D. Jordan, who has been handling noncompete litigation for almost 30 years. “An interesting and not so common issue in this case involves the ‘inevitable disclosure’ principle,” noted Jordan.

Dean Foods claims that Johnson’s work at DFA will “unquestionably” require the disclosure of confidential information, which will provide DFA with a competitive advantage over Dean Foods. Dean Foods accuses DFA of intentional interference with business relations and accuses Johnson of breach of contract. It accuses both of unfair competition and misappropriation of trade secrets.

Dean Foods said that Johnson had worked for the company since 1982 and 4,000 employees ultimately reported to him. Dean Foods said that in exchange for protective provisions including the noncompetition and nonsolicitation clauses in Johnson’s contract, the company provided lucrative incentive compensation, including restricted stock units. Dean Foods said that Johnson was offered a severance agreement in June, in which he agreed that the protective provisions, including the noncompetition agreement, were still in full force.