The Texas Supreme Court has issued an opinion this morning holding that noncompetition agreements supported by stock options and good will are not unenforceable as a matter of law. I previewed this case here. As I have time to digest the majority, concurring and dissenting opinions, I’ll provide more thoughts on this case. You
Competitors Beware — No-Hire Agreements May Draw Unwanted Attention from the Feds
Last year the Antitrust Division of the U.S. Department of Justice filed suit against several technology sector companies over their mutual agreements not to recruit each other’s employees through the use of cold-calling. The DOJ contended that such agreements (sometimes called no-switching or no-poaching agreements) had the effect of reducing competition for high tech employees; limited employees’ opportunities to find
Dallas Court Strikes Physician Noncompete that Lacked Buy-Out Provision
I’ve previously written about the specific requirements that must be included in a covenant not to compete with a licensed physician to make the restrictive covenant enforceable. The Dallas Court of Appeals recently affirmed a trial court’s decision that a noncompetition agreement between a surgical practice and several limited-partner physicians was unenforceable because the agreement lacked one of the statutorily required
Supreme Court of Texas Grants Review in Stock-Options Noncompete Case
Last summer, I detailed the Dallas Court of Appeals’ decision in Marsh USA, Inc. v. Cook where the court held a noncompetition agreement supported only by stock-options as consideration was unenforceable. You can read that post here. Today, the Supreme Court of Texas announced that it would hear the appeal from the Dallas Court of Appeals. You can
Competing versus Preparing to Compete
I subscribe to about 20 very good labor and employment law blogs. This week, one of the blogs I follow posted a good summary on the employee duty of loyalty and what activities are proper and improper for an employee to engage in who is about to start a venture that competes with his or her current employer.
Jon Hyman’s post
Appeals Court Holds Trial Court Must Conduct Evidentiary Hearing in Ruling on Temporary Injunction in Noncompete Case
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
San Antonio Court of Appeals Holds Doctrine of Unclean Hands Doesn’t Invalidate Noncompetition Agreement
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).
“Mad Men” Teaches What Not To Do When Leaving An Employer to Form a Start-Up Competitor
Last week’s season finale of AMC’s critically acclaimed series "Mad Men" shows a prime example of how to get involved in big time litigation when leaving a former employer to start-up a competing enterprise or work for a competitor. Mad Men is a made for cable series set in the 1960’s about a Madison
Texas Appellate Court Continues Trend of Enforcing Noncompetition Agreements
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
Texas Relaxes Requirements to Enforce Noncompetes Against Physician-Owners
In addition to containing reasonable restrictions as to time, geographic scope and scope of activity to be restrained, Texas imposes additional requirements for enforceable covenants not to compete with licensed physicians. Those additional requirements include that the covenant:
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not deny the physician access to a list of his patients whom he had seen or treated