Jul 16, 2007 | By Robert Wood | Read Time: < 1 minute | #Noncompete Agreements

Enforceable Noncompete Agreements: Is At-Will Employment Really “Illusory”?

Texas courts routinely hold that at-will employment is "illusory" consideration.  Because the employer is free to terminate the employee at any time, the courts reason, giving an at-will job to someone is, legally speaking, meaningless.  Thus, non-compete agreements in Texas based upon that consideration are unenforceable. Not all states agree.  While researching a noncompete matter in Illinois the other...

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Jul 13, 2007 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Noncompete Agreements in Texas: Forum Selection Provisions Are Enforceable

Texas courts have long held that Texas law should determine whether non-compete agreements affecting Texas residents are enforceable.  As a result, Texas courts generally will not enforce out-of-state choice of law provisions.  However, as a recent Texas Supreme Court case illustrates, contractual forum selection provisions can alter that result. In Re AutoNation, Inc. involved a suit filed in Broward...

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Jul 12, 2007 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Noncompete Agreements in Texas: Some Restrictions Are Overly Broad

Non-compete agreements routinely provide for the employer to get injunctive relief in the event the employee engages in post-employment competition. In a recent case, the agreement in question subjected the employee to potentially harsher penalties.  The non-compete in question contained the following provisions: 14.     Restrictive Covenant. In consideration of the benefits being provided to the Employee pursuant to this Agreement as...

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May 30, 2007 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Texas Employment Agreements: To Obtain Reformation of Noncompete Agreements in Texas, Seek Injunctive Relief

In a recent case in Houston, the First District Court of Appeals upheld a trial court’s failure to reform an overly broad covenant not to compete. The covenant was overly broad in three respects: (a) there was no geographical limitation; (b) the covenant prohibited the employee from contacting all of his former employer’s customers, not merely the customers with whom the...

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May 17, 2007 | By Robert Wood | Read Time: < 1 minute | #Noncompete Agreements

Texas Noncompete Agreements: Difference Between Buy/Sell Agreements and Employer/Employee Agreements

In the context of one company purchasing another company, a non-compete agreement is far more enforceable than it would be in an employer/employee situation.  That’s hornbook law.  A good explanation for this was given in a Texas Supreme Court case:   In the case of covenants not to compete incident to the sale of a business, the seller’s promise...

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May 16, 2007 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Texas Noncompete Agreements Enforceable? How Definite Must Promise to Provide Confidential Information Be?

Even after Sheshunoff clarified the law governing non-compete agreements, we continue to see agreements that cause us to scratch our heads and wonder whether they are enforceable. Sheshunoff made clear that, even in an at-will employment situation, a delay between the employee signing the non-compete agreement and receiving the information is not fatal to the agreement’s enforceability. However, “How strong...

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May 16, 2007 | By Robert Wood | Read Time: 2 minutes | #Noncompete Agreements

Texas Covenant Not to Compete Agreements Law: Can An Employer Protect Its Customer Relationships?

In several states, an employer may–via a non-compete agreement–prevent a departing employee from taking advantage of the relationships the employee developed with the former employer’s customers.  This is true whether or not the identities of the former employer’s customers are "confidential." In those states, therefore, the former employer can successfully contend, "We introduced you to our customers and you’ve...

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Apr 9, 2007 | By Robert Wood | Read Time: < 1 minute | #Noncompete Agreements

Noncompete Agreements in Texas: In Non-Compete Cases, Suing Only Individual Defendant Can Be Risky Strategy

Company X’s employee (who is bound by a non-compete agreement) resigns and begins working for Company Y (a competitor of Company X).  Company X sues its former employee for violating his non-compete.  Months later, they reach a settlement, and a final judgment is entered. Company X can then sue Company Y for tortiously interfering with the non-compete agreement between...

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