We’ve talked about the Texas Supreme Court’s opinion in Marsh USA v. Cook and its legal niceties, but what does it mean for employers and what should they be doing in light of the ruling?  The fact of the matter is we won’t know until lower courts address the opinions, but here are a couple of suggestions for employers:

  1. Non-competes are getting easier and easier to enforce in Texas – All employers should consider including post-employment covenants in their employment agreements if warranted;
  2. Employers should consider using financial consideration to form the basis for a non-compete or non-solicit;
  3. Financial consideration could include stock options (the consideration in the Marsh case) and other items such as signing bonuses or agreed to severance – frankly these options may be limitless;
  4. It will take some time for lower courts to determine what Marsh means but include financial consideration in some form in the agreement; and
  5. Even if a non-compete is unenforceable it may still make an employee think twice before leaving.

Next time we’ll address what employees should be considering.