Mann Frankfort Stein & Lipp Advisors, Inc., Mfsl Gp, L.L.C., and Mfsl Employee Investments, Ltd., Petitioners, V…

Summary

The Texas Supreme Court held that a client-purchase provision in a certified public accountant's at-will employment agreement is an enforceable covenant not to compete under Business and Commerce Code section 15.50(a) because, where the nature of the employment reasonably requires the employer to furnish confidential information for the employee to perform the contemplated duties, the employer impliedly promises to provide it, and the employer's actual provision of confidential client information satisfied the Act's 'otherwise enforceable agreement' requirement despite the illusory at-will promise. Because the covenant is enforceable, Fielding was not the prevailing party under the agreement's attorney-fee clause, and the Court did not reach whether section 15.52 preempts contractual fee claims or whether the provision is severable. The Court reversed the court of appeals and rendered judgment that Fielding take nothing. Justice Hecht, concurring, would have held that section 15.52 preempts an employee's attorney-fee claim in a declaratory-judgment action and urged that covenant disputes focus on the reasonableness of restrictions rather than contract-formation technicalities.