Dallas Business Relationships

The Business and Commerce Code states that the enforceability of a covenant not to compete is governed exclusively by the provisions of the Business and Commerce Code. The code provides that, subject to any applicable provision of Section 15.50(b) concerning physicians' covenants, a covenant not to compete is enforceable if ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.

In addition to being reasonable, a covenant not to complete must comply with certain other requirements to be enforceable against a person licensed as a physician by the Texas State Board of Medical Examiners, and is governed by a special standard. First, the covenant (1) must not deny the physician access to a list of the doctor's patients seen or treated within one year of termination of the contract or employment; (2) must provide access to medical records of the physician's patients on authorization of the patient and any copies of medical records for a reasonable fee established by the Texas State Board of Medical Examiners under the Medical Practice Act; and (3) must provide that any access to a list of patients or to patients' medical records after termination of the contract or employment not require the list or records to be provided in a format different than that by which the records are maintained except by mutual consent of the parties to the contract. Second, the covenant must provide for a buy out of the covenant by the physician at a reasonable price or, at the option of either party, as determined by a mutually agreed on arbitrator or, in the case of an inability to agree, an arbitrator of the court whose decision is binding on the parties. Third, the covenant must provide that the physician will not be prohibited from providing continuing care and treatment to a specific patient or patients during the course of an acute illness even after the contract or employment has been terminated. If you have a dispute involving a Physcians Covenant not to Compete, or a similar Doctors Non-Compete agreement, please Contact Us.

Employer Employee Relations

An employee is a ``person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed''. Conversely, an employer is a person who hires an employee and has control over the details of the employee's work. The relationship of employer and employee is established by contract. The terms ``servant'' and ``employee,'' and ``master'' and ``employer,'' are practically synonymous and are often used interchangeably, as colonial as that may sound.

Interference with Existing and Prospective Contacts

The right of recovery for tortious interference with business relations by a third person is well established in Texas law. The theory of tortious interference encompasses two causes of action: (1) tortious interference with existing contracts and (2) tortious interference with prospective contractual relations . ``Generally, the theory of the tort of interference is that the law draws a line beyond which no member of the community may go in intentionally intermeddling with the business affairs of others''

The primary differences between tortious interference with an existing contract and tortious interference with prospective contractual relations are (1) the existence of a contract versus the reasonable probability of obtaining a contract, (2) the nature of the culpable conduct, and (3) the treatment of justification or privilege. In a 2001 opinion, the Texas Supreme Court examined the two types of interference torts, noting the confusion that had arisen between them over the years. The Court took ``the opportunity to bring a measure of clarity to this body of law,'' as least in regard to the types of culpable conduct that must be proven to establish liability.

Different standards are applied by the courts, depending on whether the interest of the plaintiff is a property right arising from a contract, or merely a right to compete freely in the marketplace. In the early case of Delz v. Winfree, the Texas Supreme Court was concerned with whether or not the motive of the defendant was the pursuit of his or her own legitimate economic concerns. In describing a defendant who had no legitimate economic interest, the Court labeled the interference of the defendant in the business affairs of another person as ``malicious'' and ``wanton,'' but did not otherwise define these terms. However, in a significant opinion issued in 2001, the Court acknowledged that terms such as ``malicious,'' ``improper,'' or ``below the behavior of fair men similarly situated'' are not particularly useful analytical tools. Similarly, concepts like ``competitive'' or ``justified'' that have been used to characterized a defendant's legitimate interference with prospective contractual or business relations also are abstractions that are not always ``imbued with content''. After an examination of the history and development of the tort of interference with prospective contractual or business relations, the Court concluded that actionable conduct must be ``independently tortious,'' that is, it must ``violate some other recognized tort duty'' or be proscribed as unlawful by state law

In dealing with alleged interference with an actual contract rather than with the expectancy of beneficial economic relations in Raymond v. Yarrington, the Texas Supreme Court was concerned with protecting contract rights as property rights. In this economic situation, the characterization of tortious conduct was reduced from ``malicious'' interference to ``knowing'' inducement of breach of contract.

Texas cases characterize interference actions as intentional torts, and in this respect, Texas law is in agreement with the majority of jurisdictions in finding that negligent interference with either a contract or a prospective contract is not actionable.