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.

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