| Read Time: 2 minutes | #Noncompete Agreements

Texas Unfair Competition Claims Can Be Asserted Even Without Enforceable Noncompete Agreement

Earlier this year, the Austin Court of Appeals handed down a very interesting opinion in a Texas misappropriation of trade secrets case.  This case demonstrates that even without an enforceable noncompete agreement, a Texas employer may be able to inhibit a former employee’s ability to unfairly compete or use or disclose the employer’s trade secrets. In this case, a...

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The Right to Work Myth and Texas Noncompete Law

Texas courts continue to confirm the enforceability of some noncompete agreements here.  I routinely here from people that "Texas is a right to work state, and noncompete agreements are not enforceable here."  Five years ago, Texas courts were extremely unsympathetic to noncompete agreements.  But ever since the Sheshunoff and Mann Frankfort cases were decided, Texas courts have been more willing to...

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Temporary Injunction Denied in Texas Noncompete Case

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...

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Scope of Noncompete Agreements

The 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...

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Texas Trial Court Abused Discretion By Denying Temporary Injunction

In 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...

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Does Constructive Discharge Affect Enforceability of Texas Noncompete Agreement?

In 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...

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Enforceability of Clawback Provisions in Texas

What 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...

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Scope of Noncompete Agreements in Texas

Assuming 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...

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Right to Work Texas. Texas Noncompete Agreements Enforceable

 “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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Stock Options in Texas Noncompete Agreements

A recurring issue in Texas law is whether financial compensation can constitute sufficient consideration for a non-compete agreement.  This issue came up recently in a case from the Dallas Court of Appeals. In that case, a company that provided insurance brokerage services granted some stock options to one of its managing directors.  The options were conveyed in an Employee...

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