PRISINTI BY

RLSSILL CAWYIR, KELLY HART & HALLMAN, LLP

And
RYAN M. MI LLIR, CRUZ- BRUNO, PLLC
Tc r r c n t Co u n t u c r As s o c i c t i o n
L c b o r c n d Emp l o u me n t L c u S e c t i o n L u n c h e o n
Au q u s t : , z o: :
NoncompeLe AgreemenLs:
TIe Pro-EnIorcemenL Trend
PresenLuLIon TopIcs
O NoncompeLe RequIremenLs
O Common uw HIsLorv und RecenL Cuse uw
O crsh USA Inc. cnd crsh & cLenncn
Compcnies, Inc. t. Rex Cool
O TIe mpucL oI crsh USA Inc.
A NON COMPITI TI ON AGRIIMINT I S
INIORCIABLI I I I T I S:
1 . Reus onubl e i n t i me, s c ope und ueour uphy; und
. As u t hr es hol d mut t er, unc i l l ury t o or pur t oI
un ot herwi s e enI or c eubl e uureement ut t he
t i me t he uur eement i s mude.
$0 0 TIX. BLS. & COM. COI 1 =. =o( u)
Non-CompeLe RequIremenLs
CourL`s Two-SLep ApproucI
O IrsL, does un oLIerwIse enIorceubIe ugreemenL
exIsL beLween LIe purLIes.
O Second, Is LIe covenunL uncIIIurv Lo or purL oI LIuL
ugreemenL.
AncIIIurv meuns 'suppIemenLurv.`
PurL meuns 'one oI severuI . . . unILs oI wIIcI someLIIng Is
composed.`
1 . COMMON LAW PROHI BI TI ALL RISTRAI NTS ON
TRAI.
. TIXAS JLRI SPRLINCI:
W &nenIorceubIe us u resLruInL on Lrude und conLrurv Lo pubIIc poIIcv.
. MOVIMINT TOWARS INIORCIMINT:
W nLeresL oI Trude.
Common uw HIsLorv und
RecenL Cuse uw
Ccse Lcu
O Hill t. obile Auto Trim, ;z= S.W.zd 168 (Tex.
18;):
SIorL-IIved opInIon proIIbILIng enIorceubIIILv bused on LIe
common cuIIIng LesL.
O eScntis t. Wcclenhut Corp., ;S.W.zd 6;o(Tex.
1o):
CovenunL noL Lo compeLe unenIorceubIe wIen empIover Is
unubIe Lo provIde evIdence oI proLecLubIe InLeresL.
egIsIuLure`s uLLempL Lo reverse LIe CourL`s uversIon Lo
enIorcIng noncompeLe ugreemenLs.
Ccse Lcu
O Liqht t. Centel Cellulcr Co. o[ Texcs, 88 S.W.zd
6q (Tex. 1q):
Two-Pronged ApproucI Lo LIe oLIerwIse enIorceubIe
ugreemenL quesLIon.
TIe Liqht GIve RIse RequIremenL: More Restrictive thun
the Common Luw Role.
PosL Liqht t. Centel Cellulcr
O Alex Sheshuno[[ cncqement, L.P. t. 1ohnson, zo
S.W.d 6qq (Tex. zoo6):
Liqht IeId Lo be overIv resLrIcLIve.
&nIIuLeruI conLrucL LIuL wus unenIorceubIe wIen mude couId
supporL u covenunL noL Lo compeLe.
O cnn Ircnl[ort Stein & Lipp Adtisors, Inc. t
Iielder, z8 S.W.d 8qq (Tex. zoo):
AnoLIer sLep uwuv Irom Liqht und Lowurds greuLer
enIorceubIIILv.
&nIIuLeruI conLrucL LIuL wus unenIorceubIe wIen mude couId
supporL u covenunL noL Lo compeLe.
I SSLI
WIe L Ie r u c ov e nu nL noL L o c ompe L e s I g ne d bv u v u I ue d
e mpI ov e e I n c ons I de r u L I on oI s L oc k opL I ons I s une nI or c e u bI e u s u
mu L L e r oI I u w bec u us e s L oc k opL I ons dI d noL g I v e r I s e L o u n I nL e r e s L
I n r e s L r u I nI ng c ompe L I L I on.
crsh USA Inc. cnd crsh &
cLenncn Compcnies, Inc. t. Rex Cool
SHORT ANSWIR
TIe Cour L Ie I d L Iu L L Ie c ons I de r u L I on I or L Ie nonc ompe L e
u g r e e me nL wu s r e u s onu bI v r e I u L e d L o L Ie c ompu nv ` s I nL e r e s L I n
pr oL e c L I ng I L s g oodwI I I .
crsh USA Inc. - cclqround
O ursI & cennun (C) Is LIe purenL compunv oI
vurIous rIsk munugemenL und Insurunce busInesses,
IncIudIng ursI.
O ursI IIred Rex Cook In 18.
O ursI oIIered Cooke LIe opLIon Lo purcIuse C
sLock pursuunL Lo u ncenLIve und SLock Awurd PIun.
O Cook exercIsed opLIon In zoo=.
crsh USA Inc. - The Non Compete Aqreement
O TIe AgreemenL proIIbILed Cook Irom:
SoIIcILIng or uccepLIng busIness oI LIe Lvpe oIIered bv C
durIng Cook`s empIovmenL; or
SoIIcILIng unv empIovee oI C wIo reporLed Lo Cook
dIrecLIv or IndIrecLIv Lo LermInuLe LIeIr empIovmenL wILI C
Ior purpose oI compeLIng wILI C.
O Cook resIgned und ImmedIuLeIv vIoIuLed LIe
AgreemenL.
O ProceduruI HIsLorv.
O Purpose oI LIe ncenLIve PIun wus Lo udvunce LIe
InLeresLs oI C und ILs sLockIoIders.
crsh USA Inc.
HOLI NG
TIe Cour L IeI d L IuL L Ie c ovenunL noL L o c ompeL e I s
unc I I I ur v L o or pur L oI un oL Ier wI s e enI or c eubI e conL r uc L
bec uus e L Ie bus I nes s I nL er es L beI ng pr oL ec L ed ( goodwI I I ) I s
r eus onubI v r eI uL ed L o L Ie c ons I der uL I on gI ven ( s L oc k
opL I ons ) .
RIPRISINTING IMPLOYIRS LSING NONCOMPITIS
O Continoe tyinu noncompete to promise to provide
conIidentiul inIormution.
O Consider tyinu Iinunciul considerution provided to
employees to noncompete und uoodwill.
W Bonoses
W Sulury
W Ixpense uccoont to entertuin costomers
W Ior cuose terminution provision
W Reserved purkinu spuces
W Iuncy New Job Title
TIe mpucL oI crsh, USA Inc.
RIPRISINTING IMPLOYIRS LSING NONCOMPITIS
O Resist the orue to uo too lonu or too broud.
W ReIormution kills dumuues.
O Mursh isn't Muuic Bollet -Buttle is still Temporury
Injonction threshold.
W Sobstuntiul probubility oI soccess on the merits.
W Imminent, Irrepuruble Hurm.
TIe mpucL oI crsh,
USA Inc.
TIe mpucL oI crsh, USA Inc.
RIPRISINTING IMPLOYIIS
O Pre-siuninu -Neuotiute the restriction.
W Curve oot costomers employee is brinuinu to new
employer.
W Be speciIic und nurrow in scope oI uctivity to be
restruined.
W Try to uet the employer to uuree to "uurden leuve.
W Ask thut u "boy oot provision be incloded.
W Ask thut restriction be wuived iI employee terminuted
withoot cuose.
O When leuvinu
W Ask new employer to indemniIy, deIend und udvunce
costs.
W Seek term contruct thut uouruntees employment even iI
the employee is enjoined.
TIe mpucL oI crsh, USA Inc.
RIPRISINTING IMPLOYIIS (continoed)
O When Litiuutinu
W Iocos on the elements Ior entry oI u temporury injonction.
W Remind the coort oI Mursh's limited holdinu
Noncompetes bused on stocks options uren't per se
onenIorceuble -they ure ulso not per se enIorceuble.
W istinuoish yoor client Irom the lonu-term, hiuhly vuloed
Munuuinu irector ut Mursh.
W Muke sore und determine the porpose oI the uureement Irom
the other side.
IdentiIy lesser restrictions thut will serve thut porpose.
W Muke the restriction look like its porpose is u nuked restriction
on competition.
TIe mpucL oI crsh,
USA Inc.
TIe mpucL oI crsh, USA Inc.