Keith Clouse, a Dallas noncompete lawyer, comments on a Houston court’s ruling that overrode a choice-of-law provision to apply Texas law to a forfeiture agreement. Drennen v. Exxon Mobil Corp., No. 14-10-01099-CV (Tex. App.—Houston [14th], Feb. 14, 2012), available at http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=df777ff1-b5da-4eb0-a244-524632f65d04&MediaID=bd9c3101-8b09-48ec-bf68-8ae33937470c&coa=coa14&DT=Opinion.
The agreement entitled the employee to receive incentive awards unless the employer believed the employee acted detrimentally to the employer. When the employee retired and began working for a competitor, the employer cancelled the incentive awards, and the employee sued. Following a jury trial, the employee appealed, arguing the trial court erred in denying his motion for judgment notwithstanding the jury’s verdict.
The employer argued New York law applied because the parties selected New York law in their agreement; the employee argued Texas law applied. The Court held that the detrimental activity forfeiture clause was a covenant not to compete that would be enforceable under New York law but unenforceable under Texas law because it did not contain reasonable limitations on the employee’s ability to compete. The Court then elected to apply Texas law because Texas had a materially greater interest than New York in the matter and because the application of New York law would be contrary to Texas’s public policy. The Court reversed the trial court’s judgment.
Texas noncompete law is intricate and rapidly changing. To speak to Mr. Clouse or to another noncompete lawyer about a noncompete agreement, contact the employment lawyers at Clouse Dunn LLP via email at [email protected] or telephone at 214 220 3888.
Press Release Contact Information:
KEITH A. CLOUSE
Clouse Dunn LLP
214.220.3833 ( fax)