In Texas, at-will employees can prepare to compete against their current employers without violating the common law duty of loyalty. Determining whether the line between lawful preparation to compete and unlawful competition begins is sometimes gray. (See post). A recent case from the Houston Court of Appeals provides a good summary of what an at-will
noncompete
More Thoughts on Marsh USA v. Cook: Fundamental Changes in Texas Noncompete Law
I’ve had a chance to reread and digest the Marsh USA opinions over the weekend. For those looking for easy ways to set aside or void noncompetition agreements in Texas, Marsh USA is strike three. (Strike 1, Strike 2). The Texas Supreme Court has, in the past five years, taken Texas from…
BREAKING NEWS: Texas Supreme Court Issues Opinion Enforcing Non-Compete Supported by Stock Options and Goodwill
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…
Does Texas Law Recognize a Claim against Competitor’s Poaching of Employee?
Many times one competitor sues another competitor over the hiring or two or more employees (whether over allegations of a breach of contract or misappropriation of trade secrets), the Complaint will make allegations of employee "poaching". This gives rise to the question about whether Texas recognizes a cause of action for one competitor’s poaching of another competitor’s…
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…
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…
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
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Dallas Court of Appeals Holds that Award of Stock Options to Employee May Not Be Sufficient to Support Covenant not to Compete
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…