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District Court Sets Aside FTC’s Rule Banning Non-Compete Agreements

From the Court's ruling: "For the reasons enumerated above, it is ORDERED that Ryan and Plaintiff-Intervenors’ Motions for Summary Judgment are GRANTED. (ECF Nos. 166, 168). Additionally, for the reasons the Court grants Plaintiffs’ Motions for Summary Judgment, the Court DENIES the FTC’s Motion for Summary Judgment. (ECF No. 184). The Non-Compete Rule, 16 C.F.R. § 910.1–.6, is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter."

Employment Non-Competes: State of Play

While 2022 featured many new state laws and court decisions concerning covenants not to compete in employment contracts, the state of non-competes in Texas saw no change. However, 2023 brought non-competes to the headlines nationally and created a lot of questions for business owners and employees regarding the continued enforceability of non-competes. As of the date of this article, non-competes are still enforceable in Texas. However, employers with employees in other states need to pay close attention to the state of play for non-competes in the state in which their employees reside. In addition, national assaults on non-competes have arisen from the proposed rule making by the Federal Trade Commission and the National Labor Relations Board. This article summarizes the factors to ensure anon-compete is enforceable in Texas and then discusses recent federal actions: the Federal Trade Commission proposed rule and the National Labor Relations Board memorandum.

Drafting the Bullet Proof Non-Compete

The basic principle of non-compete law is reasonableness, and that’s a pretty fuzzy concept. That means there will almost always be some argument that no matter how well the non-compete is drafted, it is unreasonable. Still, there are ways to draft a non-compete to maximize the chance that a court will enforce it later. So here are the key questions that come up when you’re drafting a typical Texas non-compete.

Non-Compete Case Update

This paper summarizes and discusses a number of recent Texas cases involving non-compete provisions.

Protecting Your Client's Information And Customer Relationships: The Intersection Of Non-Competes, Trade Secrets, And Employee Confidentiality Agreements

Although a variety of steps can be taken to protect trade secrets, the primary objectives of a trade secret program is to (1) identify the company’s valuable trade secrets and (2) prevent their public disclosure by making reasonable efforts under the circumstances to maintain their secrecy. Each company has its own unique needs and requirements. Thus, whatever trade secret program is adopted and implemented must be tailored and should complement the company’s existing methods of operation, employment structure, and third party relationships.

Texas Covenants Not to Compete: Shedding Light on a Marshy Landscape

Last December, in a controversial decision, the Texas Supreme Court significantly altered the requirements that an employer must meet to enforce a covenant not to compete in Texas. Marsh USA Inc. v. Cook, 354 S.W. 3d 764 (Tex. 2011). The Court‘s decision in Marsh made noncompete clauses easier to enforce and continued its recent trend favoring such agreements. See, id. at 774–75 (discussing the Court‘s holdings in Alex Sheshunoff Management Services, L.P. v. Johnson, 209 S.W.3d 644,651 (Tex. 2006) and Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009)).

Texas Non-Compete Law

A discussion of recent cases involving non-competition clauses in contracts.