The Supreme Court of Texas heard oral arguments on March 1 in a case that could expand the ability of employers to restrict future employment without any geographical limitations. In Horizon Health Corp. v. Acadia Healthcare Co. Inc., individual Acadia defendants were each subject to non-competes that were limited to one year and directed only to direct competition by a “psychiatric management company.” However, none of the non-compete agreements contained any geographical limitations. The trial court granted Horizon’s summary judgment motion that the covenants not to compete were valid and enforceable and awarded damages for future lost profits for the breach of the non-compete. The appellate court did not directly address the summary judgment holding that the covenants not to compete against the individual defendants were valid, enforceable, and breached, but did hold that the award of future lost profits was improper. On appeal before the Supreme Court of Texas, Acadia has argued that both the summary judgment finding that the covenants not to compete were enforceable and that the award of future lost profits were improper.
The relevant Texas law is Tex. Bus. Com. Code § 15.50(a), which states:
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