Businesses of all types and sizes throughout the United States, Mexico and beyond bring their disputes to Gardere's litigation team and receive practical, responsive, boutique-style attention in return. Our clients have access to the firepower and value of a well-known and highly-regarded Firm's capabilities and interdisciplinary strengths.
Gardere has a national and international energy practice formed around our Energy Industry Team, which is a multidisciplinary group of approximately 60 attorneys with diverse backgrounds, experience and skills specific to the energy industry. Our team includes attorneys who have served as in-house counsel for major energy companies, providing a depth of insight into our clients' needs, issues and concerns. We understand and regularly practice in virtually every sector of the energy, and we represent a wide variety of industry participants from multinational corporations to individuals.
From our offices in the United States and Mexico, our International Practice helps clients operate in today’s global economy. We have more than 30 professionals operating as a boutique within an Am Law 200 law firm and are able to provide focused service with the resources of a large firm. We understand that clients who are engaged in the global marketplace need lawyers who can operate seamlessly across multiple jurisdictions. Our international experts are multi-lingual, are culturally fluent and intimately familiar with various legal systems across the world, especially those in Latin America. Whether you need help with commercial transactions, regulatory matters, customs and import regulations, immigration matters, M&A and joint ventures, international disputes, or international tax planning, Gardere’s international team is here to assist you.
We represent domestic and foreign private funds in all aspects of fund formation, fund operations, platform and add-on acquisitions, and portfolio company operations. Our team has a reputation for being the go-to-lawyers for private equity funds, hedge funds, venture capital funds and family offices. We are known for our vast deal experience, the efficient way we staff and manage our work, and the way we maintain our relationships. We get deals done with sophisticated, strategic, and practical advice tailored to the needs of our clients.
*Not admitted to practice law.
In a significant shift from prior rulings, the Texas Supreme Court ruled that the issuance of stock options which are exercised by an employee can support a non-competition agreement. This ruling presents employers with an additional opportunity to obtain non-compete agreements from employees in certain situations.
Roy Cook, a Managing Director of Marsh McLennan (“Marsh”), was awarded stock options. Under the terms of the stock option grant, Cook would be required to execute a non-competition agreement when he exercised the options. Cook subsequently exercised the options and signed a non-competition agreement. A few years later, Cook resigned from Marsh and began working for a competitor. Marsh sued Cook and his new employer to enforce the non-compete agreement.
In a 6-3 decision, the Texas Supreme Court ruled that the non-competition agreement was enforceable if it was reasonable in its scope of restricted activity. Breaking from its previous decisions, the Court ruled that the consideration given in exchange for a non-compete agreement need not “give rise” to the interest in restraining competition. Instead, the Court ruled, there need only be a nexus between the consideration and the employer’s interest worthy of protection by the non-compete agreement. Announcing a new standard for enforceability of non-compete agreements in Texas, the Court declared that the interest the employer is protecting by the non-compete, in this case, the company’s goodwill, must only be “reasonably related” to the consideration, or the stock options, provided by the company. Notably, the Court emphasized Cook’s key executive-level position with the company and that the options were only offered to select employees, and carefully explained the stock options resulted in Cook’s ownership of the company, which reasonably related to the company’s interest in protecting the company’s goodwill.
The decision in Cook has left many open questions. For example, what other types of consideration will suffice in exchange for an employee’s promise not to compete? The next battleground is likely to be whether other types of compensation, including incentive bonuses, retention bonuses, or other incentives tied to the health, reputation or goodwill of the company will be sufficient consideration. Whether this reasoning will apply to lower level employees or only to key executives of a company likewise remains an open issue. Finally, the opinion suggests that there may be more business interests protectable through a non-compete agreement than previously announced by the court in its previous rulings.
Gardere’s Labor and Employment attorneys have extensive experience helping employers draft and enforce non-compete agreements. If you would like to discuss the impact of this ruling on your company’s current non-competition agreements, or if you would like to explore ways to increase the use of non-competes in your business, please contact the Gardere Labor and Employment Group.
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