Peat Marwick Main & Company, Successor to Certain Interests of Kmg Main Hurdman, Petitioner and Cross-Respondent, V…

Summary

The Texas Supreme Court held that the client‑acquisition damages provision in the partnership agreement operates as a restraint of trade and is unreasonable, therefore unenforceable. Accordingly, the Court reversed the Court of Appeals' judgment and affirmed the trial court's judgment for Haass. Justice Cornyn dissented, arguing the provision is a permissible reimbursement clause and should be enforced. The decision also rejected the application of the Covenant Not to Compete Act to the case.