Texas Noncompete Agreements: Not Always Enforceable, Even After Marsh USA
Even after the Marsh USA case, some noncompete agreements are still unenforceable in Texas. In a recent opinion by the Texarkana Court of Appeals, the noncompete agreement stated as follows:
I agree not to seek employment on a temporary, contract or permanent basis at any company where introduced by Hiring Partners, Inc. for a period of ninety (90) days. I will not seek to induce any client to call other temporary or contract agencies for their temporary, permanent or project assignments. This means that I will not knowingly inform other services of Hiring Partners, Inc. clients and/or rates charged at these client companies. Nor will I discuss my hourly rate with other individuals working for Hiring Partners, Inc. nor other temporary or employment agencies.
Hiring Partners, Inc. realizes that clients may seek help from other temporary or employment agencies and, that I may also be called upon by another agency to fill other positions; however, I may not accept an assignment through another agency for a period of ninety (90) days at a firm/company that applicant has been introduced to by Hiring Partners, Inc.
Hiring Partners, Inc. reserves the right to replace a candidate working on assignment at its own discretion, without this signed agreement being altered in any way and considers such to remain in effect for a period of ninety (90) days from the date last worked by applicant.
The court noted that there was no mention of confidential or trade secret information or specialized training in the agreement. In addition, at trial, the operations manager for the Plaintiff testified that no confidential information was provided to the employees as part of their employment.
The agreement specified that employment was on an at-will basis. The court held that employment at will, by itself, is insufficient consideration for a noncompete agreement.
As this opinion demonstrates, even after the Marsh USA case, employers must ensure that their noncompete agreements so that they are supported by proper consideration. A mere promise of "at will" employment is not enough.