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St. Mary's Law Journal

Abstract

The unpredictability of court decisions on covenants not to compete is an attorney’s nightmare in Texas. The Texas Supreme Court's decision in Light v. Centel Cellular (Light II), holding that trade secrets may serve as independent consideration for a valid covenant not to compete, has only exacerbated the situation. Currently, attorneys and clients alike are at the mercy of judicial unpredictability. Texas courts have managed to muddle their own underlying public policy on covenants not to compete with trade secrets. During the years preceding Light II, Texas courts consistently struck a balance between the legitimate rights of employers to protect their trade secrets and those of employees to market their skills and gain employment. Today, this distinction has all but vanished. Present case law is ineffective and stands as an omnipresent threat to both employers and employees in Texas. Until the Texas Supreme Court adopts a clear rule, even the most experienced and creative legal practitioners will continue participating in the high stakes gamble regarding how best to zealously protect their clients’ interests. This Article reviews the tormented history of trade secret laws in the State of Texas. In the course of balancing the need to protect trade secrets against the need to limit unreasonable restraint on trade, Texas courts are urged to provide separate assessments of tort causes of action for trade secret misappropriation and contract causes of action for breach of a covenant not to compete. Additionally, this Article focuses on the fundamental problems created by the hybrid of contract and tort causes of actions which have fused trade secret misappropriation and breach of covenants not to compete claims.

Publisher

St. Mary's University School of Law

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