Although Texas courts have loosened the restrictions on the enforceability of certain employee agreements over the past two decades, Texas law still requires employee agreements to be supported by adequate consideration—i.e., mutual, non-illusory promises between employee and employer. The recent case of Eurecat US, Inc. v. Marklund, No. 14-15-00418-CV, 2017 WL 2367545 (Tex. App.—Houston [14th Dist.] May 31, 2017, no pet. h.) illustrates what is not adequate consideration.
In Marklund, the only consideration stated in the parties’ Patent and Trade Secret Agreements was “continued employment.” Since both employees were at-will employees, the Fourteenth Court of Appeals held that this was insufficient to support the agreements. The employer argued, however, that it it provided the employees with confidential information before their signing of the agreements. This, too, was insufficient because the employer failed to provide the employees with new information. Under Texas law, confidential information provided to the employee before the employee signed the agreement was not adequate consideration for the non-disclosure agreement.
So what is the lesson here? An at-will employee non-disclosure must be based on some new consideration in order to be enforceable. Employers needs to provide new cash, benefits, confidential information, or other consideration in connection with the signing of the new agreement. Reliance on “continued employment” or some other previously provided benefit will likely not be enough for courts to deem the non-disclosure agreement enforceable.