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BUSINESS
LITIGATION PRIMER |
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Dallas Business Relationships Covenants not to Compete 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. 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 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. |
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