In Cameron International Corp. v. Guillory, a case very similar to the Drennen opinion we discussed last week, the Houston Court of Appeals examined a trial court’s denial of a temporary injunction involving an oil field services employee.  Jeremy Guillory, like the Exxon employee in Drennen, was a participant in a restricted stock program that included a “detrimental activity” policy.  Detrimental activity was defined to mean:

  • engaging directly or indirectly in any business, which is or becomes competitive with [Cameron];
  • soliciting, interfering, inducing, or attempting to cause any employee of [Cameron] to leave his or her employment; and
  • directly or indirectly soliciting the trade or business of any customer of [Cameron].

So the language is very similar to a non-compete and the court of appeals characterized it as such.  Guillory went on to start a competing venture and Cameron sued to stop him. The trial court denied the injunction request.  The appeals court focused on two issues: (1) choice of law; and (2) the fact the employee did not physically sign the non-compete.  After determining that Delaware law controlled, the appeals court moved on to the siganture issue.

Guillory never physically signed the agreement.  Instead, he was presented with the agreements on his computer.  In order to move to each individual agreement Guillory had to click on an “accept” button that indicated he reviewed and understood the documents.  Guilory did not dispute that he clicked the accept button but asserted some type of claim that either didn’t understand the agreement or read it.  The appeals court rejected that argument.   The court then noted that both  Texas and Delaware have adopted the Uniform Electronic Transactions Act which contains a provision that prevents a party from claimining an agreement is not enforceable when the record of signature is in electronic form. Because of that, Guillory could not claim that the agreement was uneforceable.

The appeals court went on to examine the agreement under Delaware law and proceeded to reverse the trial court and enter an injunction.  The takeway is courts are going to enforce electronic agreements, which are seen more and more in both the employment and commercial contexts. Guillory signed the agreement and wasn’t going to get out of it simply because there was no physical signature.