Quinn Emanuel recently secured a decisive and early victory for a new client, Steno Agency, Inc., in an employment dispute regarding the attempted enforcement of restrictive covenants.
Steno, a national court reporting start-up, sought Quinn Emanuel’s help after a recent hire received several letters from her former employer, Veritext, threatening to enforce a set of restrictive covenants. Veritext claimed this employee was prohibited from taking any position at Steno or any other competitor in the court reporting field for two years. These restrictive covenants were contained in employment documents that this employee had signed years earlier, when she was offered the opportunity to roll over her small stock ownership in Veritext. Veritext argued that the employee’s de minimis ownership interest allowed it to enforce a non-compete that would otherwise be invalid in California.
Veritext informed this employee of its intent to enforce these covenants on a Tuesday. It asked her to confirm by the following Monday that she would not continue to pursue employment with Steno. Steno turned to Quinn Emanuel for help.
The Quinn Emanuel team relied on a simple but bold strategy: quickly file a complaint and TRO application to preempt any effort by Veritext to file first in a less favorable forum. This strategy involved a heavy upfront lift. The team drafted a complaint, TRO application, and associated declarations over the weekend. They made sure filing occurred first thing Monday morning in Contra Costa County Superior Court.
The complaint and TRO papers were filed and served on Monday morning. By 3:00 pm Veritext had completely surrendered, conceding that the employee could go to work at Steno. Quinn Emanuel had obtained a decisive and swift victory for its client before the court even had a chance to read its complaint.