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 merger agreement is an unreasonable restraint of trade and therefore unenforceable, applying the same reasonableness standards used for covenants not to compete. The Court reversed the Court of Appeals' partial remand and affirmed the trial court judgment in favor of Haass. Justice Cornyn, dissenting, argued that the provision is a permissible remedy to protect goodwill and should be enforced. The decision also rejected the application of the Covenant Not to Compete Act to reform the provision.