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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Once 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...
Continue ReadingSeveral Texas courts have held that a victorious employer in a noncompete case cannot recover its attorneys’ fees against the losing employee. This is based upon the fact that the Texas noncompete statute does not explicitly authorize an award of attorneys’ fees to a winning employer. However, a recent case out of the Houston Court of Appeals shows that...
Continue ReadingThe Texas statute governing noncompete agreements contains specific requirements that must be met for a physician noncompete agreement to be enforceable. One such requirement is that the agreement must contain a provision allowing the physician to "buy out" of the noncompete if he or she wishes to do so. In a recent case from the Houston Court of Appeals,...
Continue ReadingMisappropriation of trade secrets is a proper basis for a court to order a temporary injunction; however the language in the injunction must be limited to prevent it from becoming blanket prohibition on competition. In Reliant Hosp. Partners, LLC v. Cornerstone Healthcare Group Holdings, Inc., 374 S.W.3d 488 (Tex. App.—Dallas 2012, pet. filed), Cornerstone Healthcare Group (“Cornerstone”) brought suit...
Continue ReadingA decision from the Arizona Court of Appeals illustrates precisely why employers must exercise care when choosing to classify particular company information as trade secrets. Reversing the lower court’s grant of a counterclaim for misappropriation of trade secrets, the court in Calisi v. Unified Financial Services, 2013 WL 1490465 (Az.Ct. App. 2013) determined that the employer failed to demonstrate...
Continue ReadingWhile an employer may draft an enforceable non-compete covenant, it does not automatically follow that courts will enforce it with injunctive relief. Such was the case in Welsco, Inc. v. Brace, 2012 WL 4087224 (E.D. Ark. 2012). There, although the employment agreement was considered reasonable in both scope and duration, the...
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