Retreat By First Court of Appeals - Movant for Temporary Injunction in Non-Compete Case Must Show Probable Harm

Resolving a dispute it created with the Beaumont Court of Appeals reported here last month, the First Court of Appeals has re-examined its holding in Norlyn Enterprises and reversed its opinion on the impact of Section 15.51 of the Texas Business & Commerce Code on traditional equitable principles for a temporary injunction. In Cardinal Health Staffing Network, Inc. v. Bowen (Tx. Ct. App. - Houston [1st Dist.] 4/3/03], it now holds that in order to obtain a temporary injunction in a non-compete case, a court must find that there will be irreparable harm. Interestingly in doing so, it points to two contrary decisions by the Dallas Court of Appeals in 1990 and 1993 and now respectfully disagrees with them. It also declines the invitation of Cardinal Staffing to adopt the 'inevitable disclosure' rule, saying it would not matter in this case even if adopted, but raising doubts about whether it should be. The opinion notes that Court voted to consider it en banc, presumably necessary since it was overruling a prior decision of the court.