For most of the late 1990s and early 2000s, it was considered nearly impossible to have an enforceable non-compete in Texas. After clarification by the Texas Supreme Court in 2006, non-competition agreements in Texas found new life.
This April the Texas Supreme Court again affirmed that noncompetition agreements are alive and enforceable in this great State of Texas.
A Houston accountant argued the noncompetition provisions of his signed at-will employment agreement were unenforceable. Yes, he promised not to disclose confidential information. However, his employer made no express return promise to provide any confidential information. Two lower courts agreed with the accountant. The “Supremes” went with the employer.
The bottom line? Covenants not to compete are enforceable when properly implemented. An employer does not have to make an advance promise to provide confidential information to an employee to create an enforceable non-compete. The employer must only actually provide confidential information pursuant to the employee’s promise to keep the information secret.
So, employees beware.
See Mann Frankfort Stein & Lipp Advisors, Inc., MFSL GP, L.L.C., and MFSL Employee Investments, Ltd., v. Brendan J. Fielding, WL 1028051, 52 Tex. Sup. Ct. J. 616 (Tex. 2009)
See April 24, 2008, Tilting the Scales – Business Issues with a Legal Slant “Non-Compete Repeats in Texas” at http://lrmlawblog.com/tilt/2008/04/24/non-competes-repeat-in-texas.