We are coming up upon the one year anniversary of the Marsh v. Cook decision where the Texas Supreme Court altered the non-compete playing field in favor of Texas employers, again. In Marsh, the Court held that stock options could serve as the basis for a non-compete agreement and that the traditional trade secretes/training/proprietary information giving rise to the non-compete was no longer the exclusive method for forming enforceable non-competes.
In response to the opinion, many commentators questioned what additional items, such as signing bonuses, stock, etc. could form the basis for a non-compete in Texas. Surprisingly, we have not seen much in the way of new opinions from Texas’ lower courts discussing this issue. Our appellate courts are slow moving animals and the ramifications of an opinion like Marsh will take several years to arise. In sum, we have no further guidance from the courts and the questions that we raised after the opinion still remains.
That said, employers that have something worthy of protection or simply want to prevent employees from competing should aggressively consider the use of non-competes in light of the Marsh opinion. Obviously, consult with your lawyer when drafting or considering using post-employment covenants, but design them so that they will be enforceable and enforce them.
