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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A recent case from the Beaumont Court of Appeals highlighted the difficulty that employers sometimes face in enforcing noncompete agreements in Texas. In this case, a physician practice group sued one of its former physicians for violating a noncompete agreement. The physician had left the practice and started his own practice within the proscribed 22-mile radius. The trial court...
Continue ReadingThe Fort Worth Court of Appeals recently issued a very interesting opinion on the geographic scope of noncompete agreements in Texas. In this case, a publishing company did business in Johnson County, Texas. The company hired the defendant to sell advertising for it. The defendant’s job duties were performed in Johnson County. The defendant resigned and began competing in...
Continue ReadingIn Texas, when can a court enjoin speech in order to prevent tortious interference from occurring? There is no easy answer to this question. However, courts generally disfavor “prior restraint”–i.e., forbidding speech even before it occurs. Thus, Texas courts have held that even speech that is false or defamatory cannot be prohibited by court order. Of course, a person...
Continue ReadingIn a recent case in Houston, a state trial court’s denial of an application for a temporary injunction was overturned. In denying the requested temporary injunction, the court had failed to receive any testimony that might have supported the issuing of an injunction. The court of appeals held that failing to receive testimnony necessitated reversal of the trial court’s ruling, for the following reasons: First, the trial court...
Continue ReadingIn a recent case in a federal district court in Texas, the defendants–individuals who had signed non-compete agreements with their previous employer–contended that their agreements should not be enforceable because they were "constructively discharged" (i.e., forced to resign). The federal district court rejected this contention. In doing so, the court noted that "termination of at-will employment does not invalidate a restrictive covenant...
Continue ReadingA recent appellate case from Houston demonstrates that, in determining whether non-solicitation agreements are enforceable, Texas courts treat them as non-compete agreements. In the case, an insurance broker was bound by an employment agreement that contained the following provision: Accordingly, the Executive understands and agrees that for a period of two (2) years following the termination of his employment...
Continue ReadingWhat happens when an employer gives an employee stock in exchange for a non-compete agreement, but the non-compete agreement is held to be unenforceable. Does the employee still get to keep the stock? This question was raised in a case in which the employer gave a ten percent ownership interest in the company to one of its employees. The...
Continue ReadingTexas noncompete agreements routinely contain a provision prohibiting an employee from soliciting, or doing business with, her employer’s customers (except on her employer’s behalf). Not infrequently, these provisions preclude the employee from soliciting any of her employer’s customers. However, some Texas cases have held that such provisions are too broad. Several Texas cases have held that nonsolicitation provisions should...
Continue ReadingAssuming a non-compete agreement in Texas is worded properly and supported by adequate consideration, the next question is whether the restrictions contained in the agreement are reasonable. Texas courts have routinely held that the scope of the restrictions should bear some relationship to the activities that the employee performed for his former employer. For example, if an employee performs...
Continue Reading“Texas is a right to work state–non-compete agreements are unenforceable here.” You’ve heard that 100 times, right? I know I have. And it is dead wrong. The fact that Texas is a “right to work” state means that Texas employees can’t be forced to join a union. It has nothing to do with whether non-compete agreements are enforceable. In...
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