In a recent Texas case involving a restrictive covenant, the plaintiff contended that the duration of the non-compete covenant should be judicially extended beyond the agreement’s normal expiration date. In that case, the seller of a dance studio entered into an agreement in which she promised not to compete with the buyer. As is true in most states, non-compete covenants contained...
Continue ReadingWhat happens if an employer seeking to enforce a non-compete agreement is itself in breach of the agreement. Does the employer’s previous breach adversely affect its ability to enforce the non-compete? Maybe. It’s "hornbook" law in Texas that one party to a contract is precluded from enforcing a contract if that party itself is in “material” breach. In DeSantis v....
Continue ReadingNot infrequently, whenever an employer hires a competitor’s ex-employee, the competitor sues not only its ex-employee (for an alleged non-compete violation, breach of fiduciary duty, misappropriation of trade secrets, tortious interference, etc.), but also the new employer. The plaintiff contends, for example, that just as its ex-employee is liable for using and disclosing its trade secrets, the new employer...
Continue ReadingEmployees signing employment agreements in Texas should be mindful of the following potential terms: 1. Term of Employment. Employment agreements are typically either for a fixed term or are at-will. An at-will agreement, obviously, can be terminated by either party at any time for any reason. Some agreements contain “Evergreen” provisions, which state that the term of the agreement shall be...
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