Austin Noncompete Attorney Gregory D. Jordan Remarks on Texas Court’s Rejection of Injunction Request
Austin, TX (Law Firm Newswire) January 31, 2014 - An error in a noncompete agreement led a Texas court to reject an injunction request.
The Fourteenth Court of Appeals ruled that LasikPlus of Texas could not enforce a covenant not to compete against a doctor, formerly employed by the clinic, who planned to open his own practice nearby. They stated that the noncompete agreement did not include language required by statute.
“The court's decision is a reminder that covenants not to compete must be drafted with precision,” said Gregory D. Jordan, an Austin business attorney and Austin employment lawyer who often deals with noncompete agreements. “At a minimum, a noncompete agreement involving medical personnel must include the language required by statute.”
The noncompete agreement at issue barred the doctor from opening a competing practice within 20 miles of the LasikPlus clinic in Houston and from soliciting its clients for 18 months following the end of his employment. The covenant expressly provided for an injunction to be issued if it was violated, and it contained language stating that if a court found the agreement to be unreasonable in scope, it could enforce it to the degree that would be reasonable.
However, the agreement failed to include language required by the Texas Covenants Not to Compete Act, which provides that such covenants relating to the practice of medicine must include a buyout provision. Because the agreement in question contained no such provision, the court ruled that it was unenforceable.
LasikPlus conceded that the noncompete agreement did not contain the buyout language that the statute required, but the company argued, among other things, that the trial court should have reformed the covenant to make it enforceable (because of the language permitting the court to revise the covenant if it was found to be unreasonable). However, the court of appeals rejected this argument because it found that the covenant was not unreasonable, but rather unenforceable, as a matter of law.
LasikPlus also argued that there was a mutual mistake with regard to the drafting of the agreement. However, the court noted that there was an uncontroverted affidavit by the doctor in evidence stating that he raised the possibility of a buyout, and LasikPlus rejected it.
Law Offices of Gregory D. Jordan
5608 Parkcrest Drive, Suite 310
Austin, Texas 78731
- Texas appeals court’s decision shows importance of wording in noncompete agreements
A recent decision by a Texas appeals court demonstrates that the wording of a noncompete agreement must be precise. In the case, East Texas Copy Systems, Inc. v. Player, the Court of Appeals in Texarkana ruled that a noncompete agreement was nonbinding due to the language used in the agreement. As part of the sale [...]
- Texas property owners file class-action suit against Devon Energy over royalties
A class-action lawsuit has been filed by Texas property owners alleging that Devon Energy used sham transactions to underpay natural gas royalties. On January 6, class-action status was granted by U.S. District Judge Ed Kinkeade in Dallas, allowing the four individuals who brought the lawsuit to represent the interests of thousands of landowners. The judge [...]
- Investment firms sue oil company, alleging breach of contract
An oil company was sued by two investment firms in Harris County District Court in Texas over an alleged breach of contract. SSG Advisors, LLC and Chiron Financial LLC filed the lawsuit against Daybreak Oil and Gas Inc., claiming that Daybreak violated an agreement among the three companies. The investment firms claim they are owed [...]