1-1 By: Carona S.B. No. 885
1-2 (In the Senate - Filed March 3, 1997; March 5, 1997, read
1-3 first time and referred to Committee on Jurisprudence;
1-4 April 10, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; April 10, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 885 By: Duncan
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to limitations on certain covenants.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 15.50, Business & Commerce Code, is
1-13 amended to read as follows:
1-14 Sec. 15.50. Criteria for Enforceability of Covenants not to
1-15 Compete; CONSIDERATION. (a) Criteria. Notwithstanding Section
1-16 15.05 of this code, a covenant not to compete is enforceable if it
1-17 is ancillary to or part of an otherwise enforceable agreement or
1-18 otherwise valid transaction or relationship [at the time the
1-19 agreement is made] to the extent that it contains limitations as to
1-20 time, geographical area, and scope of activity to be restrained
1-21 that are reasonable and do not impose a greater restraint than is
1-22 necessary to protect the goodwill or other business interest of the
1-23 promisee.
1-24 (b) Consideration. A covenant not to compete made after
1-25 commencement of the underlying agreement, transaction, or
1-26 relationship must be supported by consideration other than the
1-27 continuation of the agreement, transaction, or relationship.
1-28 SECTION 2. This Act takes effect September 1, 1997.
1-29 SECTION 3. The importance of this legislation and the
1-30 crowded condition of the calendars in both houses create an
1-31 emergency and an imperative public necessity that the
1-32 constitutional rule requiring bills to be read on three several
1-33 days in each house be suspended, and this rule is hereby suspended.
1-34 * * * * *