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Click here for the full text of this decision FACTS:AutoNation Inc. owned more than 250 automobile dealerships across the country. Its corporate headquarters and principal place of business were in Florida. In 1999, AutoNation purchased a dealership in Houston where Garrick Hatfield worked. In 2002, Hatfield, a Texas resident, transferred to Mercedes-Benz of Houston-North (MBHN), another AutoNation dealership. Hatfield was employed at will as the general manager of MBHN. In 2003, Hatfield signed a “Confidentiality, No-Solicitation/No-Hire and Non-Compete Agreement” as a condition of continued employment. The agreement was between Hatfield and AutoNation “together with its subsidiaries and affiliates,” and included a one-year covenant not to compete. A choice-of-law provision stated that the agreement would be construed under Florida law, and a forum selection clause provided that all suits arising out of the agreement must be filed in Florida. In January 2005, Hatfield left AutoNation to accept a position with A-Rod OC LP, a competing Mercedes-Benz dealership. On Feb. 7, 2005, AutoNation sought enforcement of the noncompete agreement by filing a suit for injunctive relief and damages against Hatfield in a Broward County, Fla., state court. On March 2, 2005, before learning of the Florida action, Hatfield and A-Rod filed suit against AutoNation and MBHN in a district court in Harris County, Texas. This suit sought a declaratory judgment that the noncompete obligation was governed by Texas law and unenforceable. On or about March 14, 2005, after learning of the Florida suit, Hatfield and A-Rod filed an application for temporary restraining order and motion for temporary injunction in the Texas action, arguing that Texas law should govern a Texas resident’s noncompete agreement, that AutoNation was attempting to circumvent Texas law by pursuing the Florida action, and that the Florida court likely would refuse to apply Texas law in deciding the enforceability of the non-compete agreement. On March 31, 2005, AutoNation answered the Texas suit and moved to stay it on grounds that AutoNation and Hatfield were parties to the first-filed Florida action. AutoNation also filed a response to the application for TRO and motion for temporary injunction, arguing that the Texas action should be dismissed or stayed because, among other reasons, the parties had contractually agreed to litigate their disputes in Florida and the Florida action was filed first. A few days later, the Texas court signed a temporary injunction that enjoined AutoNation from “taking any further action in connection with the pending lawsuit in Florida . . . attempting to enforce purported covenants against competition signed by Garrick Hatfield and AutoNation, Inc.,” and “filing any future litigation in any non-Texas court seeking to enforce the aforementioned covenants against competition.” The next day, AutoNation filed a notice of accelerated appeal of the injunction order, and the following week it filed a petition for writ of mandamus in the 14th Court of Appeals. The 14th Court denied mandamus relief on the ground that an adequate remedy at law was available to AutoNation, namely its earlier-filed interlocutory appeal. AutoNation sought mandamus relief from the Texas Supreme Court. Eventually, the 14th Court concluded that “[b]ecause the Texas Supreme Court has held that fundamental Texas public policy requires application of Texas law to the question of enforceability of a non-compete agreement, we are unable to hold that the trial court abused its discretion in issuing an injunction to halt the Florida proceeding and allow the Texas case to proceed to trial.” HOLDING:The court conditionally granted the petition for a writ of mandamus. Forum selection clauses, the court stated, generally “should be given full effect” and “should control absent a strong showing that [they] should be set aside.” Mandamus relief is available to enforce forum selection clauses, the court stated. Hatfield, the court stated, did not demonstrate fraud, overreaching or undue hardship that would provide an exception to the rule that forum selection clauses are generally honored. But Hatfield pointed to the Texas Supreme Court’s 1990 decision in DeSantis v. Wackenhut Corp. that held that enforceability of the noncompete agreement “must be judged by Texas law, not Florida law.” In ruling against Hatfield, the court distinguished DeSantis, noting that it decided the case before the now-applicable version of the Covenants Not to Compete Act and its 2006 decision in Alex Sheshunoff Management Services LP v. Johnson construing the act. DeSantis also did not concern a mandatory forum selection clause or first-filed litigation in the parties’ chosen jurisdiction, the court stated. OPINION:Willett, J., delivered the opinion of the court, in which Jefferson, C.J., and Hecht, Wainwright, Brister, Medina, Green and Johnson, JJ., joined. CONCURRENCE:O’Neill, J., filed a concurring opinion. “I agree with Hatfield that deciding which noncompete agreements constitute reasonable restraints of trade on employees in this state is a matter of fundamental Texas public policy. . . . But a mere indication that the Florida court intends to apply Florida law does not, without more, justify a Texas court’s interference with the parties’ chosen forum.”

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