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.

Austin Oil and Gas Attorney, Gregory D. Jordan

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.