The Sheshunoff Decision: Finally! Enforceable Noncompete Agreements for At-Will Employees in Texas

All employers have good reason to welcome the Texas Supreme Court's most recent ruling on noncompete contracts. Much of the confusion that made noncompete contract enforcement in Texas difficult to predict has been eliminated.

In Alex Sheshunoff Management Services, L.P. v. Johnson, the Texas Supreme Court shifts the focus for noncompete contract analysis away from technical timing and contract formation issues that dominated recent decisions, and back to whether the contract is reasonable and necessary for the protection of a legitimate business interest. Lower courts were split on whether the Texas Covenant Not to Compete Act required a specific formation process with unique timing requirements.

It is now clear that the contract formation process will be less important than the content of the contract and circumstances surrounding performance of it. Moving forward, the primary focus will be "whether and to what extent a restraint on competition is justified."

Join us for a complimentary in-depth look at this new decision and what it means to Texas employers.

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