Longer Reach Has Advantages in Venue Selection: Texas Lawyer

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Alan Bush and Lee Winkelman are routine freelance contributors for Texas Lawyer.  Their latest article, “Longer Reach Has Advantages in Venue Selection,” appeared in the December 21, 2015 issue.

Enforcing a non-compete is often easier in your company’s own back yard – and with Texas law.  Companies headquartered in Texas often like sticking local.  Thanks to recent SCOTX and Fifth Circuit rulings, Texas companies have been dealt a better hand to do it. 

Here’s what Alan and Lee had to say:

The Red River Rivalry runs deep. Oklahoma is one of the last places where anyone would expect that Texas non-compete and non-solicit law would get respect. Texas generally favors the agreements; Oklahoma’s resistance to them is notorious. Conventional wisdom: Oklahoma law governs a non-compete or non-solicit signed by an employee working north of the Red River – even if the agreement picks Texas law.

Never count out the long arm of the law. The Fifth Circuit recently sized up several Oklahoma bankers’ non-solicits using the law of the Lone Star State. Check out the bombshell in Cardonia v. Prosperity Bank. Thanks to the Fifth Circuit, Texas companies now have more ammo to pick Texas law (and venue) in non-competes and non-solicits for employees who work out-of-state.

Let that sink in. A company headquartered in Texas and with employees spread across several states would probably rather prosecute all non-compete enforcement actions in Texas and under Texas law. And a Texas company that sells into a larger market against competitors based outside the state would rather not chase an ex-employee to another state to enforce his non-compete. The long arm of Texas law might just reach that far….

Read the full article for more.  In it, Alan and Lee lay out some practical thoughts on how to:

·         Pick Texas law on non-compete and non-solicits; and

·         Stick venue on enforcement actions in Texas.