Courts in Texas continue to struggle with the law regarding non-compete agreements, as a recent decision by the Dallas Court of Appeals indicates. That opinion adds to the trouble Texas employers may face when they seek to protect their business interests through enforcement of existing non-compete agreements with at-will employees.
A fundamental requirement for enforceability of a non-compete agreement in Texas is that the agreement must be "ancillary to or part of an otherwise enforceable agreement at the time the agreement is made." Tex. Bus. & Com. Code §§ 15.50. If the only "other agreement" with the employee is the at-will employment relationship, the covenant not to compete is not enforceable. Notwithstanding a reference in the statute to at-will employment relationships, the Texas Supreme Court has held that an employment at-will relationship, without more, does not constitute an "otherwise enforceable agreement." Light v. Centel Cellular Co., 883 S.W.2d 642 (Tex. 1994).
Employers often argue that a covenant not to compete can be ancillary to an agreement not to disclose confidential information. The court in the Light decision cited such an agreement, given in exchange for the employer actually providing the information, as an example of an "otherwise enforceable agreement." However, since then, several cases have raised concerns about how the courts will construe these types of agreements in the future.
First, the agreement must contain a "promise" to actually
Texas is an at will employment state, which means that an employer or an employee can terminate work without having to provide a reason for termination (Runkel, n.d.). Although another interpretation of this is, “in an at-will employment situation, either party may terminate the employment at any time for any reason except discrimination” (Johnston, 2002, para. 3). Appears to be simple, yet it is more complex than it sounds. After reviewing the case Laredo Medical Group v. Mirelas, it becomes clear that just because by law, a reason does not have to be given to the employer or employee for termination of work, the reason for termination is relevant. Josefina Mirelas sued Laredo Medical Group under the accusation that they terminated her employment
In Passalacqua, the appeal court held that the appellee could not have provided specialized training to the appellants because based on the appellant’s testimony; their training came from reviewing a manual, and a day of “on the job” training. Passalacqua v. Naviant, Inc., 844 So. 2d 792 (Fla. Dist. Ct. App. 2003). In this case, the appellants quit three weeks after signing the non-compete agreement and started their own business; their former employer sought injunctive relief on the basis that they had legitimate business interests to protect, one being specialized training about the customer database. Id. at 793. The court favored the appellant’s testimony showing that that the appellee’s did not provide specialized training; therefore, they ruled that the non-compete agreement could not be enforced on the appellants. Id. at 794.
However, the ruling in this case and others like it prove that employers can, in fact, be bound by articles written in an employee handbook when disciplining or discharging an employee. An abysmally written handbook can greatly jeopardize an employer’s right to terminate at will. Trends show that courts are increasingly acknowledging enforceable promises in the past employment practices of firms, in employer handbooks and in oral commitments. In addition to including an at-will disclaimer in employee handbooks, employers should also require employees to sign an acknowledgment confirming that they understand and agree to employment-at-will and that at-will employment can at any time be modified by a written agreement. Personnel manuals should explicitly state that the employer reserves the right to terminate employment at will. All written policies should also be free of any language that could be considered as a guarantee of job security. To be sure that these common pitfalls are avoided employers must retain the service of a labor attorney to draft and air-tight employee manual and acknowledgment
The employment At-Will doctrine is in place to allow employment relationships to be restricted. It allows employers and employees to terminate a relationship at any time without cause. The doctrine will allow employees to quit without any fear of being held liable for any inconvenience or disruption to the business at the time of quitting. This doctrine also allows employers to make any changes towards an employee’s term of employment (N, 2017). However, some exceptions could prevent an employee to make those changes if the employee is covered in that particular area. Doyle A
In addition, the “At-Will-Employment Law” gives the employer the capacity to unfairly change the terms of the employment relationship with no notice and no consequences.
Employment at will is a law that is present in all fifty states in the US; although, in Montana there requires a stated cause for termination. Employment at will creates dissent among employees when they have been terminated for a cause that is thought to be unsubstantial or when no cause is given. There are pros and cons to the presumption, and employees and employers have different views. Employment at will means that the employer can terminate an employee at any time, for any cause without warning. However, even an at-will employee cannot be terminated because of discriminatory reasons. Employment at will also means that an employee can leave a job at any time without the fear of facing any legal consequences. An employer can also
No compete clauses are not pervasive in public or private industry but they often exist in situations and with people where trade secrets and other sensitive information is potentially at risk. Employers do so to protect themselves but many states and territories around the world either highly restrict them or outright ban them from even being implemented due to it ostensibly being unfair or punitive to the employee. The author of this paper is asked to focus on a fictional situation involving a non-compete clause and is asked to answer several different questions. The elements of a non-compete clause that must be present are to be explained as well as a number of related concepts including offer, acceptance, capacity and so on. The author is asked whether common law or UCC applies to non-compete agreements and what part(s) of the agreement would make the aforementioned fictitious agreement unenforceable.
Lillard, Monique C., Fifty Jurisdictions in Search of a Standard: The Covenant of Good Faith and Fair Dealing in the Employment Context, 57 Mo. L. Rev. (1992)
Employment-at-will has been an established segment of common law in the United States, which states that either party to
statement of fact when it is made by one who knows best as it carries
Sesamware is a Japanese software company which is very popular for open source software. Sesamware got international approval with an online multiplayer fantasy dimension game, Para World in mid-1990. Para world was very popular in the world between 2001 and 2004. Firstly, it was installed as part of the bundle downloaded by hundreds of millions of gamers around the globe. The open source code helped to easily adapt every facet of computer life for all platforms and operating, networking, navigation and security systems.
Employers have taken favor to these provided addendums in employment contracts and given all the requirements met have seen to be commonly enforced in the court of law. They are often popular in the market of media-related jobs, or any profession related to exposed entertainment personnel, like radio and media broadcasting. However, court systems and many states are not in total favor of this anti-competition covenant, some states have placed their own statutory restrictions on the covenant (ex: Florida). The state of California has actually ban these restrictive agreements when applied to employment contracts, unless the contract is under the sell of a business.
As an employer in Texas, or elsewhere, you may deem it necessary at some point to terminate a worker’s employment. Depending on the circumstances, however, this may prove difficult, and could result in costly litigation. In order to avoid a drawn out legal dispute, you may consider using a severance agreement.
Competition in economics is rivalry in supplying or acquiring an economic service or good. Sellers compete with other sellers, and buyers with other buyers. In its perfect form, there is competition among many small buyers and sellers, none of whom is too large to affect the market as a whole; in practice, competition is often reduced by a great variety of limitations, including monopolies. The monopoly, a limit on competition, is an example of market failure. Competition among merchants in foreign trade was common in ancient times, and it has been a characteristic of mercantile and industrial expansion since the Middle Ages. By the 19th century, classical economic theorists had come to regard
In an era of organizational flux due to competition and globalization, companies and employees are faced with constant change. Leaders must be able to adapt to change as the environment shifts. HR has been known as the organizational change agent, administrative expert, and employee advocate. More recently they have been regarded as business strategic partners for many organizations. In order to be successful and remain competitive in today’s market, Human Resources (HR) must be considered a strategic partner if an organization wants to flourish. Top executives today commit significant resources to ensure that their company’s functions are capable of rapid change and achieving their