Keith Clouse, a Texas non-compete lawyer, notes that the San Antonio appellate court recently ruled in a non-compete dispute. The Court held that a company’s failure to pay commission payments to an employee could not defeat the employer’s breach of contract action against the employee for alleged violations of a non-compete agreement. Cent. Tex. Orthopedic Prods., Inc. v. Espinoza, No. 04-09-00148-CV (Tex. App.—San Antonio Dec. 9, 2009).
The employee alleged that the employer could not recover on its breach of contract action because the employer violated another agreement between the parties regarding commission payments and thus had “unclean hands.” The clean hands doctrine is an equitable affirmative defense designed to prevent a party who has engaged in unconscionable conduct from receiving court-awarded equity. The doctrine only applies if the misconduct at issue is connected to the subject matter of the litigation and if the party asserting the defense has been seriously harmed by the misconduct. Here, the employee could not establish that the employer had unclean hands because the employer’s alleged inequitable conduct constituted a breach of a different agreement and thus was separate from the subject matter of the litigation concerning the non-compete agreement.
To speak with a non-compete lawyer regarding a non-compete agreement, please contact the employment law lawyers at Clouse Dunn Khoshbin LLP at [email protected].
