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Click here for the full text of this decision FACTS:Petitioner Alex Sheshunoff Management Services LP (ASM) provides consulting services to banks and other financial institutions. Respondent Kenneth Johnson began working for ASM in 1993 as an at-will employee. In September 1997, ASM promoted Johnson to director of its affiliation program, a program designed to maintain relationships with clients and prospective clients. A few months after the promotion, ASM presented Johnson with an employment agreement containing a covenant not to compete. ASM informed Johnson that signing the agreement was a condition of continued employment. Johnson signed the agreement in January 1998. The agreement was at-will in the sense that it had no fixed term of employment and stated that “[e]ither party may elect to terminate this Agreement at any time for any reason,” subject to employer and employee notice provisions. The employer notice provision stated that ASM would give notice of termination to Johnson (unless the termination stemmed from employee misconduct) but then stated that ASM could immediately terminate Johnson so long as ASM paid a specified fee to Johnson. The agreement included a covenant not to compete, providing that for one year after his termination, Johnson would not provide consulting services to any ASM clients to whom Johnson had “provided fee based services in excess of 40 hours within the last year of employment,” and would not “solicit or aid any other party in soliciting any affiliation member or previously identified prospective client or affiliation member.” In 2001, Johnson participated in confidential meetings regarding ASM’s plans to introduce a bank overdraft protection product. He requested and received an internal manual on this new product. The market leader for such products was respondent Strunk & Associates, LP (Strunk). In early 2002, Strunk contacted Johnson about hiring him. ASM offered evidence that, after Strunk contacted Johnson, he continued to receive confidential information from ASM regarding its plans to offer the new overdraft product. In March 2002, Johnson told ASM that he was leaving to work for Strunk. ASM sued Johnson, alleging breach of the covenant not to compete and seeking injunctive relief and damages. Strunk intervened. The court granted a temporary injunction. Strunk and Johnson then moved for summary judgment, arguing that the covenant was unenforceable as a matter of law. They argued that ASM’s promises to provide confidential information and specialized training were illusory at the time the agreement was made and the covenant was therefore unenforceable. The district court granted the summary judgment motions. The court denied Strunk’s request for attorney fees and entered a final judgment. The court of appeals affirmed. HOLDING:Reversed and remanded. The court revisited its 1994 decision in Light v. Centel Cellular Co., 883 S.W.2d 642 (Tex. 1994), which dealt with the enforceability of covenants not to compete in the context of at-will employment. It framed the question as whether an at-will employee who signs a noncompete covenant is bound by that agreement if at the time the agreement is made the employer has no corresponding enforceable obligation. Under Light, the answer to that question was always “no.” The court modified Light to hold that an at-will employee’s noncompete covenant becomes enforceable when the employer performs the promises it made in exchange for the covenant. In so holding, the court disagreed with language in Light stating that the Texas Business & Commerce Code ��15.50 .52 requires the agreement containing the covenant to be enforceable the instant the agreement is made. The court concluded that Johnson’s covenant with ASM was reasonable under �15.50(a). OPINION:Willett, J., delivered the opinion of the court, in which Hecht, Brister, Green, and Johnson, J.J., joined. CONCURRENCES: Jefferson, C.J. filed a concurring opinion, in which O’Neill and Medina, J.J., joined. “The Court’s holding permits an employer to enforce a non-compete covenant months or even years after the employee signed it, as long as the employer eventually fulfills its side of the bargain . . . . I would hold that the employer’s exchange of consideration must occur within a reasonable time after the agreement is made. Because that condition was satisfied on this record, I concur in the judgment.” Wainwright, J., filed an additional concurring opinion. “I disagree with the Court’s decision not to reconsider Light’s test for determining whether a covenant not to compete is”ancillary to or part of’ an otherwise enforceable agreement . . . . Both the confidentiality agreement and the noncompete are part of Johnson’s employment agreement. I would hold that the covenant not to compete is enforceable on the ground that it is ancillary to the otherwise enforceable confidentiality agreement.”

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