• Emerging from the Marsh: The Texas Supreme Court Clarifies and Solidifies the Enforcement of Non-Compete Agreements in the Employment Context
  • August 17, 2011 | Authors: Katie Chatterton; Meghaan McElroy; Dean J. Schaner
  • Law Firm: Haynes and Boone, LLP - Houston Office
  • Here we go again! For the third time in less than six years, the Texas Supreme Court has repudiated technical legal niceties and has adopted broad pro-employer principles to support the enforcement of non-competition agreements in Texas. Marsh USA, Inc. v. Cook, 54 Tex. Sup. Ct. J. 1234 (Tex. 2011). Eschewing footnotes and dicta from a prior opinion issued in 1994, the Court reasoned that an employer’s grant of stock options to an executive employee constituted sufficient consideration to support the enforcement of a non-solicitation of customers provision (in an employment agreement) against a former executive when he jumped ship to work for a competitor. The Marsh decision essentially demonstrates that confidential/trade secret information and specialized training are not the exclusive forms of employer-generated consideration necessary to enforce non-competition and non-solicitation of customer restrictions in Texas. And, in turn, the practical takeaway is that employers will find it far easier to enforce non-competition/non-solicitation agreements under Texas law.