Austin Court Holds Covenant Not To Compete Invalid For Reasons That Make Me Look Like Carnack

Well maybe not as good at predicting as Johnny Carson's Carnack, but when I reported yesterday on Beasley v. Hub City, Inc. , I noted the outcome would likely have been different if the employer had not been been able to show that the type of confidential information provided after signing a non-compete upon becoming president, truly was different from what he had access to before. Sure enough that is the holding of Alex Sheshunoff Management Services, L.P. v. Johnson (Tex. App. - Austin 10/2/03). Since the employee was given no new confidential information after he signed the covenant, it did not meet the tests of Light. The Court also held that mere daily changes in the information in the daily course of business was not sufficient, and that the promise of 2 weeks notice was not sufficient, since it was highly unlikely the employer would have actually imparted any confidential information to the employee after giving the notice.

Updated: Almost two years after it was argued the Texas Supreme Court finally issued its opinion in Sheshunoff, see Major Change in Texas Non-compete Law.