Texas Employment Law Update

Texas Employment Law Update

A Resource for Texas Employers

Tag Archives: covenant not to compete

New Developments in Employee Hiring and Noncompetition

Posted in News & Commentary, Noncompetes and Restrictive Covenants
Last week brought several interesting developments on the issue of restrictive covenants and hiring of employees among competitors including 1) the White House’s call to action (CTA) for the States to restrict use of covenants not to compete; 2) the Department of Justice’s announcement that it intends to criminally prosecute employers and executives entering into wage-fixing and… Continue Reading

Physician Noncompetes: Part 2 Reasonableness Of The Buy-Out Amount

Posted in Noncompetes and Restrictive Covenants
In Part 1 of this two-part series, I examined the temporal, geographic and scope of activity restrictions for Texas physician noncompetition provisions.  Texas law provides another unique feature required only in agreements with doctors.  Noncompetes with physicians must include a provision that permits the doctor to buy-out of the noncompete for a reasonable amount. The buy-out can be determined at inception… Continue Reading

Physician Noncompetes: Part 1 Reasonable Limitations On Time And Geographic Scope

Posted in Noncompetes and Restrictive Covenants
I’ve written before about the unique requirements that must be included in a noncompetition agreement with a Texas physician. The increasing likelihood that a Texas court will enforce a noncompetition agreement against any departing employee increases the importance that physicians and practice groups take great care in negotiating and drafting agreements with proper limitations as to… Continue Reading

Appeals Court Holds Trial Court Must Conduct Evidentiary Hearing in Ruling on Temporary Injunction in Noncompete Case

Posted in Case Summaries, Noncompetes and Restrictive Covenants
A trial court’s order granting or denying a temporary injunction in a noncompete case is rarely reversed by the court of appeals.  This week the Fourteenth Court of Appeals took the unusual step of reversing a trial court’s denial of an employer’s application for temporary injunction seeking to prohibit a former employee from engaging in certain competitive… Continue Reading

San Antonio Court of Appeals Holds Doctrine of Unclean Hands Doesn’t Invalidate Noncompetition Agreement

Posted in Noncompetes and Restrictive Covenants, Trade Secrets
In an unpublished opinion, the San Antonio Court of Appeals held that a former employee cannot avoid the effects of a noncompetition agreement under the doctrine of unclean hands, as a matter of law, when the inequitable conduct the employee complains of is separate from the issue in dispute.  (Opinion available here).  In Central Texas Orthopedic Products,… Continue Reading

Texas Appellate Court Continues Trend of Enforcing Noncompetition Agreements

Posted in Noncompetes and Restrictive Covenants
Since the Texas Supreme Court’s Sheshunoff and Mann Frankfort opinions, Texas appellate courts have, with increasing frequency, enforced covenants not to compete in the employment context.  Gone are the days when noncompetition agreements were difficult to draft and enforce in Texas. In Gallagher Healthcare Insurance Services v. Vogelsang, the First District Court of Appeals in Houston… Continue Reading

Dallas Court of Appeals Holds that Award of Stock Options to Employee May Not Be Sufficient to Support Covenant not to Compete

Posted in Noncompetes and Restrictive Covenants
In a recent opinion of the Dallas Court of Appeals, the Court held that an insurance brokerage and consulting service firm’s noncompetition and nonsolicitation agreement obtained in return for an award of stock options to an employee was unenforceable under Texas law. (See opinion here). Rex Cook was a long-term employee of Marsh USA, Inc. Prior to… Continue Reading