Calhoun v. Jack Doheny Companies, Inc., No. 20-20068 (5th Cir. 2020)
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JDC sought a preliminary injunction against its former employee for breach of a non-compete agreement. The district court denied the motion for a preliminary injunction in all its parts and with no concessions.
The Fifth Circuit held that the district court, after acknowledging the agreement to be overbroad, erred in declining to adjudicate reformation of the agreement. In this case, the district court should have considered reformation of the agreement in the process of deciding the preliminary injunction motion. Accordingly, the court vacated and remanded to the district court to allow relevant evidence and argument from the parties concerning reformation. Furthermore, the court noted that the district court should then decide what reformation, if any, would be reasonable under Texas law, and proceed to adjudicate the preliminary injunction motion in the light of its findings on reformation.
The court issued a subsequent related opinion or order on August 28, 2020.
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