Chapter § 9-1 Thirty-Thousand-Foot Perspective

• Jurisdiction: United States

9-1 Thirty-Thousand-Foot Perspective

9-1:1 Commentary

A few thoughts from the 30,000-foot perspective.

First, never overlook a crucial threshold question: is the employee actually in competition with the former employer? A 2013 case from the Dallas Court of Appeals highlights the importance of this sometimes overlooked factor:

• Strange v. HRsmart, Inc., 400 S.W.3d 125 (Tex. App.—Dallas 2013, no pet.) (noncompete prohibited employee from working at a "competing business," defined as one that provides the same or substantially similar prospects and services; in reversing summary judgment for the employer, the appeals court held there was a fact issue on whether defendant was in a "competing" business, noting that the two companies targeted different markets and that their product offerings differed).

Second, covenants not to compete are restraints on trade (a fairly broad concept that we will discuss) and are thus unenforceable—as a matter of public policy—unless the restraints on time and geographic scope are reasonable under the Texas Business and Commercial Code 15.50.

• Leath v. Tracer Constr. Co., No. 1:08-CV-358, 2009 WL 8188138 (E.D. Tex. Aug. 18, 2009) (unpublished) (excellent collection of cases).

Third, as a legal matter (but not always a practical one in certain...