Over the past decade, Attorney Robert Wood has published hundreds of articles on the Texas Contract & Noncompete Disputes Blog, establishing himself as an authority on Texas noncompete law. If you want to gain a better understanding of how non-compete and other contractual issues are handled in the Texas courts, you’re in the right place.
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Hiring employees, training them, and granting them access to industry secrets or client lists exposes employers to the possibility that employees will utilize this valued information against them. In order to protect themselves, employers will often include a covenant not to compete provision in an employment contract, commonly known as a “non-compete.” However, it is important for both employers...
Continue ReadingWhen contracting with another party, it is essential to understand which state law will govern your contract in the event you find yourself in a contractual dispute. What might seem to be a reasonable provision, agreed upon by all parties, can be interpreted radically different depending upon the state law that will govern your contract. In legalese, choosing a...
Continue ReadingAn employee of a small manufacturing company (“Acme Company”) leaves and starts his own competing company (“Best Company”). Acme Company sues the employee for doing so—because the employee signed a noncompete agreement stating that, if he left Acme Company, he would not start a competing business. In the lawsuit, the employee argues, “The existence of my new company, Best...
Continue ReadingA recent real estate dispute sheds light on what is required to prove a breach of fiduciary duty claim in Texas. In this case, potential homebuyers contracted to buy a home for $180,000. The seller, the listing agent, the appraisal district, and the real estate agent all indicated that the home’s living area was 2722 square feet. However, the...
Continue ReadingA recent Texas appellate decision demonstrates the importance of ensuring that settlement agreements are properly worded. In the case, three employees of Company A left and formed Company B. Company A sued the former employees, as well as Company B, for misappropriation of trade secrets and unfair competition. As often happens in unfair competition cases, the parties entered into...
Continue ReadingOnce again, a Texas appellate court sides with a company suing to enforce a noncompete agreement. This time, the employer sued a former employee for violating a covenant prohibiting the employee for competing for three years following the termination of his employment. Significantly, the noncompete covenant contained no geographic restriction. It did not, for example, prohibit the employee from...
Continue ReadingOn the street, there are many misconceptions about noncompete agreements in Texas. One myth is that, for a noncompete to be enforceable, the employer must have given the employee a cash payment, or a promotion, or some other monetary benefit. But this is not the law in Texas. Usually, what the employer provides to the employee as consideration for...
Continue ReadingAre noncompete agreements enforceable in Texas? You bet they are—more than ever. You know it’s bad news for the employee who is being sued when a court opinion starts with: “Texas law presumes a party has read and knows the terms of the contract that he has signed.” Ever since the Marsh USA decision, Texas courts have increasingly had...
Continue ReadingIs it lawful for a company to hire one of its competitor’s employees? It may seems ludicrous to some to ask this question. But in a recent Texas appellate decision, the court actually considered whether a tortious interference with contract claim to be based upon Company A hiring an at-will employee from Company B. The court held: “A claim...
Continue ReadingEven though noncompete and nonsolicitation provisions generally are enforceable in Texas, they must be reasonable in scope. In a recent case from the Fort Worth Court of Appeals, the court held that a provision prohibiting solicitation of employees was too broad and, therefore, unenforceable. The provision in question prohibited the employee, for a two-year period, from soliciting or employing...
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