Enforcing Covenants Not To Compete: Employers Are On A Winning Streak The Texas Supreme Court just made it easier for employers to stop former employees from competing against them. In Marsh USA, Inc. v. Cook, the Texas Supreme Court held that stock options given to an employee are sufficient consideration for enforcement of a non-compete
When contemplating hiring a new employee who works for a competitor, a concern is whether that potential employee has signed an employment agreement containing a covenant not to compete, a non-disclosure of trade secrets provision, or a non-solicitation provision. The concern is that after the new employee is hired the former employer will file a
Facts: After 10 years of being 50/50 partners in ERI Consulting Engineers, Inc. and Malmeba Company, Ltd, Larry Snodgrass agreed to buy out Mark Swinnea by paying $497,500, assigning his 50% interest in Malmeba to Swinnea, and promising Swinnea 6 years of continued employment with ERI. In return, Swinnea agreed not to compete with ERI
Under Sections 171.252 and 171.255 of the Texas Tax Code, directors and officers become liable for corporate debts when corporate privileges are forfeited for failure to file a franchise tax report, failure to pay franchise taxes, or failure to pay penalties. These Tax Code provisions also apply to limited liability companies and their members and
Opinion: The Texas Supreme Court’s recent opinion in In Re Lisa Laser USA, Inc. and Lisa Laser Products, OHG, Relators continues the trend of cases enforcing forum selection clauses in contracts. In this case, a Texas company entered into a distribution contract with a California company. The forum selection clause stated that the courts of Alameda
General Rule: Every employee owes his/her employer a duty of loyalty. That duty is not violated by an employee making some advance preparations for new employment or for the creation of a new competing business. Likewise, the duty of loyalty is not violated if an employee fails to disclose his plans or preparations to accept new
Opinion: The Texas Supreme Court’s recent opinion in Alex Sheshnoff Management Services, LP v. Johnson continues the trend of cases favoring employers in Texas. Now, covenants not to compete, assuming applicable statutory criteria for reasonableness are met, are enforceable even though the employee is not provided confidential information until well after employment begins. Departure: This
