In our last blog post on April 6th, Plano Attorney Richard Armstrong opined about non-compete covenants and misappropriation of trade secrets generally. Little did he know, however, that less than two weeks from that blog, the Texas Supreme Court would hand down yet another in a line of decisions strengthening the hand of employers with covenants not to compete. Sure enough,  on April 17th, 2009 the Court issued its opinion in MANN FRANKFORT STEIN & LIPP ADVISORS, INC., et.al. v. Fielding.  Why is this case important, you ask?  Because the case has very practical implications for employers within the State of Texas.  Essentially, the Court held that an employer doesn’t have to expressly promise to provide confidential information to its employee in order for a covenant not to compete contained in its employment agreement to be enforceable. Rather, an promise to provide such information will be implied…

“if the nature of the employment for which the employee is hired will reasonably require the employer to provide confidential information to the employee for the employee to accomplish the contemplated job duties.”

This holding expands even further the holding in the Alex Seshunoff case decided by the Court in 2006. That case strengthened employer’s power to uphold agreements containing such covenants.

Mr. Armstrong will feature a discussion of this decision on his web site during the month of July.  The combined effect of Sheshunoff and Mann Frankfort may, in Armstrong’s view, tip the scales so far in the employer’s favor that it nullifies most or all of the gains made by employees in this area between the mid-1980’s and mid-1990’s. “Many employment agreements which lacked sufficient consideration because of deficient wording or actual lack of quid pro quo, will now be enforceable,” says Armstrong. “This is most definitely another pro-business decision.”

Lawyers at, and affiliated with, Armstrong the Law Firm have successfully tried unfair competition lawsuits, both enforcing and defeating covenants not to compete. They are experienced in trade secret misappropriation matters, as well as unfair competition litigation generally.