Your Business Deserves To Thrive
In our previous blog series “Covenant Not To Compete When Buying or Selling a Business,” we looked at several state laws governing covenants not to compete in the context of buying or selling a business. This time, we will look at Texas law in depth, focusing on non-competition and non-solicitation covenants in the employment context. As we mentioned before, a…
In our previous blog series on general partnership, we talked about what general partnership is, how it is formed, and why it is important for business owners to know about it. We mentioned that one of the most peculiar features of a general partnership is that it can be formed inadvertently and that, once formed, each partner is personally liable…
Texas. In Texas, as in many other states, a covenant not to compete is enforceable if: (i) it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made; (ii) it is reasonable as to time, geographic area, and scope of activity to be restrained; and (iii) the restraint imposed is no greater than…
New York: Sale of Business and Good Will Beyond the Label. In New York, non-competes used to be strongly disfavored by courts.[1] Over time, however, courts came to recognize that there are situations in which it was not only desirable but essential to enforce non-competes.[2] For example, in the context of a sale of a business along with its good…
Florida: Reasonableness Matters. In Florida, restrictive covenants are not prohibited, so long as they are reasonable in time, area, and line of business.[1] In the context of the sale of a business or professional practice, Florida courts generally presume reasonable if the restriction is less than three years in duration and unreasonable if more than seven years in duration. Additionally,…
California: It All Comes Down to Goodwill. Generally speaking, non-competes are void under California law.[1] Exceptions do exist. In the context of the sale of goodwill in a business, for example, the seller may agree not to compete with the buyer so long as the buyer carries on a like business.[2] This makes sense because it would be unfair for…
If your business employs skilled workers, or you have been one, you may be familiar with non-compete agreement, also known as covenant not to compete. For those who are less familiar with the subject, it is a contractual provision under which one party agrees not to compete in the same business, usually for a specific time period and/or in a…
In our previous post, Can a Partner Be Held Liable for a Partnership Debt in Texas?, we discussed the Texas Supreme Court’s holding in American Star Energy and Minerals Corporation v. Stowers[1] that a creditor cannot sue individual partners to satisfy a partnership debt until a judgment is passed against the partnership and goes unsatisfied for 90 days. There is another part…
In American Star Energy and Minerals Corporation v. Stowers,[1] four partners formed a general partnership called S&J Investments (“S&J”) to invest in oil and gas properties. S&J contracted with American Star Energy and Minerals Corporation (“American”) to operate these properties. Subsequently, American sued S&J for breach of contract, which resulted in a final judgment in the amount of $227,884.46 against…
In American Star Energy and Minerals Corporation v. Stowers,[1] four partners formed a general partnership called S&J Investments (“S&J”) to invest in oil and gas properties. S&J contracted with American Star Energy and Minerals Corporation (“American”) to operate these properties. Subsequently, American sued S&J for breach of contract, which resulted in a final judgment in the amount of $227,884.46 against…