Continuing to chip away at one of its prior decisions, the Texas Supreme Court just made it a bit easier to enforce restrictive covenants in Texas. In Marsh USA, Inc. v. Rex Cook, the Court rejected prior precedent as it considered whether an employer could enforce a non-compete signed by an employee in exchange for stock options. The answer in Texas is now a clear “Yes.” And there is room to conclude that cash may suffice as consideration to support a non-compete.
As with any contract, to be enforceable, a non-compete must be supported by consideration. The Colorado Supreme Court recently fell in line with the clear majority position by finding that continued employment alone is sufficient consideration.