October 2006 - Texas Noncompete Law

Oct 21, 2006 | By Robert Wood | Read Time: 2 minutes | #Tortious Interference

Texas Tortious Interference Law: Tortious Interference with an At-Will Contract

In tortious interference with contract (or prospective business relations) cases, plaintiffs often contend that their contracts with customers—or employees—have been unlawfully interfered with. In many situations, the contract alleged to have been interfered with is an “at-will” contract (i.e., it is a contract that can be canceled by either party at any time, for any reason). An at-will employment...

Oct 21, 2006 | By Robert Wood | Read Time: 2 minutes | #Fiduciary Duty

Texas Breach of Fiduciary Damages: Can Recover Damages Even Though Not Actually Harmed

An employee may be liable for breach of fiduciary duty to his employer—even if his employer suffers no actual damages as a result of the offending conduct. So learned an employee in a recent case. In that case, the employee, a Project Manager for a general construction contractor, was responsible for locating potential subcontractors for the project, soliciting bids...

Oct 19, 2006 | By Robert Wood | Read Time: < 1 minute | #Noncompete Agreements

Texas Non Compete Agreements. What Constitutes a Promise to Give Confidential Information?

In a recent case, the employer’s consideration in exchange for the employee’s promise not to compete was set forth in the following provision: Employer hereby agrees to provide to Employee any specialized training necessary, in the opinion of Employer, to allow Employee to conduct the duties of employment with Employer. Employer further agrees to provide to Employee any...

Oct 18, 2006 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Texas Non Compete Contracts: Is Term of Employment Sufficient Consideration for Non-Compete?

One of the most frequently-litigated issues involving noncompete agreements is whether the consideration given by the employer was adequate. There are generally two parts to the inquiry: one, whether the consideration given was real (i.e., not “illusory”); and two, whether the consideration given justified the noncompete agreement in question. Giving a definite term of employment satisfies the first requirement,...

Oct 17, 2006 | By Robert Wood | Read Time: 3 minutes | #Tortious Interference

Texas Tortious Interference with Contract Law: Tortious Interference vs. Fair Competition

In our free market economy, it’s a given that competition is a good thing, right? Theoretically, yes, but courts have made it clear that competition, to be lawful, must also be “fair.” A Texas case shed some light on the difference between fair and unlawful competition. Renew Data Corporation ("Renew") provided computer forensic services for corporations. Renew would search...

Oct 16, 2006 | By Robert Wood | Read Time: 2 minutes | #Tortious Interference

Tortious Interference Overview

In situations in which an employee leaves one company and goes to work for another, a tortious interference claim may be asserted against the departing employee or the new employer. Tortious interference claims come in two types: tortious interference with (an existing) contract, and tortious interference with prospective business relations. A tortious interference with contract claim has the following...

Oct 13, 2006 | By Robert Wood | Read Time: < 1 minute | #Employment Law

Texas Employee Raiding Provisions Overview

A provision prohibiting an employee from soliciting his former employer’s remaining employees must meet the requirements applicable to noncompete agreements. Trying to attract workers constitutes fair competition (unless it is unfair, as it might be if an employee raiding provision prohibits it, or if doing so constitutes tortious interference).

Oct 9, 2006 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Texas Non-Compete Agreements: Practical Considerations

Practical considerations in this area of the law include the following: For the Former Employer : 1. In addition to (or in lieu of) a non-compete provision, an employment agreement may contain non-solicitation or employee raiding provisions. A non-solicitation provision typically prohibits a departing employee from soliciting his former employer’s customers. The "old" employer should be cognizant of...

Oct 8, 2006 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Available Remedies in Texas Non Compete Cases

An employer may be entitled to injunctive relief to enforce a non-compete agreement in Texas. To obtain permanent injunctive relief, it is not necessary to prove that, without an injunction, the promisee will suffer irreparable harm. But that is not the case with respect to temporary injunctive relief. Most courts hold that to obtain temporary injunctive relief to enjoin...

Oct 7, 2006 | By Robert Wood | Read Time: < 1 minute | #Noncompete Agreements

Texas Non Compete Agreements: Scope of Restrictions

A non-compete agreement in Texas must not impose upon the employee greater restraints than are necessary to protect the business and goodwill of the employer. Moreover, the scope must bear some relationship to the activities of the employee. It is generally permissible to keep an employee from soliciting business from customers with whom he dealt during his employment, and...