The Supreme Court of Texas, in a closely divided opinion, has just made it easier for employers to enter into and enforce covenants not to compete in Texas. In Marsh USA Inc. and McLennan Companies, Inc. v. Cook, No. 09-0558, 2011 Tex. LEXIS 465 (Tex. June 24, 2011), the Court broke new ground in ruling that stock options constitute sufficient consideration to support a non-compete agreement. And going further still, the Court made clear that the stock options, when issued during an employee’s employment, would support the enforcement of a non-compete to protect confidential information that the employee had access to prior to execution of the non-compete. There is every indication that the ruling will apply more broadly than stock options to include other kinds of consideration.
