When it comes to physician employment agreements, non-compete provisions can be controversial and tricky. The use of these agreements is nonetheless increasing and evolving as hospitals and other groups try to protect their investments in successful medical practices, especially those that they helped launch and nurture. After assuming the risks and costs of building a medical practice, they obviously do not want to see employed doctors move their practices (and patients) to a competitor.
An eternal debate in trade secrets cases is how much exposure the defendant's business personnel can get to the information that their company has allegedly misappropriated. This fight proved to be the first instance in which the Texas Supreme Court opined on that state's new trade secrets statute.
One of the most frequent Texas non-compete questions I am asked is whether an employee and employer can enter an enforceable non-compete agreement at the time of termination.
One question that often arises in the trade secret practice is what information, if any, can be protectable as confidential information even if it does not qualify under state law as a trade secret. In other words, what is the value of having a non-disclosure of confidential information provision in an agreement? What does that type of provision do that statutory or common law trade secret protections don't already provide?
A recent case from the 6th Circuit ...
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 2011 rolls upon us, five non-compete and trade secret issues are likely to share the spotlight in the coming year. Keep an eye out for judicial and legislative action in Texas, California, Massachusetts on state-specific issues. Federal Courts are likely to adress the Computer Fraud & Abuse Act. And online social media is going to become a routine part of departing employee case law.