You work for a company. Things are going well. But, the company still has not paid you everything you are entitled to under your compensation agreement. You become unhappy. A start-up lures you away. The start-up competes directly with your old company. You had signed a non-compete agreement with the old company. But, you think why should you honor the non-compete when the company did not honor your compensation agreement. In caselaw, we call that the "doctrine of unclean hands." One cannot seek equity without first being equitable itself. One cannot come to court seeking equitable relief if that person does not himself have clean hands. So, you think, the employer cannot come to court seeking equity when the employer itself has not been equitable.
Well, you, the employee, lose this argument. You lose at least before the San Antonio Court of Appeals in Central Texas Orthopedic Products, Inc. v. Espinoza. The Court found that since the breach did not grow out of the agreement which is the subject of the suit, the doctrine of unclean hands does not apply. They are separate transactions, found the court. That is, the failure to pay under the terms of the compensation agreement was a separate transaction from the non-compete agreement. One agreement was signed in 2003, while the other was signed in 2007. As Russ Cawyer says, this decision continues Texas’ trend toward supporting non-compete agreements.
See Workplace Fairness for a nice summary of non-compete agreements.