Labor & Employment Law

No Attorneys' Fees in Texas Noncompete Cases

By Robert Wood

According to the Houston Court of Appeals, a successful employer in a lawsuit brought to enforce a noncompete agreement in Texas may not recover attorneys' fees.  Texas law generally permits the prevailing plaintiff in a breach of contract case to recover its attorneys' fees.  However, the Texas noncompete statute itself does not allow a prevailing employer to recover its attorneys' fees.  In a court of appeals decision handed down in October 2010, the court held that the Texas Bus. & Comm. Code 15.50 preempts Texas law applicable to non-restrictive covenant breach of contract cases.  Thus, according to this court, a prevailing employer cannot recover attorneys' fees.  This opinion is consistent with a case decided by the San Antonio Court of Appeals in 2003.  The Texas Supreme Court has not decided this issue.

Full post as published by Texas Non-Compete Law Blog on November 09, 2010 (boomark / email).