By Carona S.B. No. 885
75R8024 LJR-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to limitations on certain covenants.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 15.50, Business & Commerce Code, is
1-5 amended to read as follows:
1-6 Sec. 15.50. CRITERIA FOR ENFORCEABILITY OF COVENANTS NOT TO
1-7 COMPETE. Notwithstanding Section 15.05 of this code, a covenant
1-8 not to compete is enforceable if it is ancillary to or part of an
1-9 otherwise enforceable agreement or otherwise valid transaction or
1-10 relationship, except [at the time the agreement is made] to the
1-11 extent that it contains limitations on [as to time, geographical
1-12 area, and] scope of activity, duration, or territory [to be
1-13 restrained] that are unreasonable and that it imposes a [reasonable
1-14 and do not impose a greater] restraint greater than is necessary to
1-15 protect the goodwill or other business interest of the promisee.
1-16 SECTION 2. This Act takes effect September 1, 1997.
1-17 SECTION 3. The importance of this legislation and the
1-18 crowded condition of the calendars in both houses create an
1-19 emergency and an imperative public necessity that the
1-20 constitutional rule requiring bills to be read on three several
1-21 days in each house be suspended, and this rule is hereby suspended.