Opinions by Justice Don Willett (Tex. 2006)

2006 Majority Opinion Written by Justice Don Willett

Justice Willett Writes Precedent-Setting Opinion on Non-compete Agreements

Sheshunoff Mgmt Serv's v. Johnson, Strunk & Assoc ., No. 03-1050 (Tex. Oct 20, 2006)(Justice Willett)
[employment, at will, post-employment, noncompete provisions, enforceability, consideration]
ALEX SHESHUNOFF MANAGEMENT SERVICES, L.P. v. KENNETH JOHNSON AND STRUNK & ASSOCIATES, L.P.;
from Travis County; 3rd district (03‑03‑00060‑CV, 124 S.W.3d 678, 10/2003)
2 petitions
The Court reverses the court of appeals' judgment in part, affirms the court of appeals' judgment in part, and
remands the cause to the trial court.
Justice Willett delivered the opinion of the Court, joined by Justice Hecht, Justice Brister, Justice Green, and Justice
Johnson

In this case we revisit the Court’s 1994 decision in Light v. Centel Cellular Co.[1] and again consider the
enforceability of covenants not to compete in the context of at-will employment. The question today is whether an at-
will employee who signs a non-compete covenant is bound by that agreement if, at the time the agreement is made,
the employer has no corresponding enforceable obligation. Under Light, the answer to that question was always
“no.” Today we modify our holding in Light and hold that an at-will employee’s non-compete covenant becomes
enforceable when the employer performs the promises it made in exchange for the covenant. In so holding, we
disagree with language in Light stating that the Covenants Not to Compete Act[2] requires the agreement
containing the covenant to be enforceable the instant the agreement is made.

Chief Justice Jefferson delivered a concurring opinion, joined by Justice O'Neill and Justice Medina
Justice Wainwright delivered a concurring opinion

Sheshunoff Mgmt Serv's v. Johnson, Strunk & Assoc. (Tex. Oct 20, 2006)(concurrence by J ustice efferson)

The Court’s holding permits an employer to enforce a non-compete covenant months or even years after the
employee signed it, as long as the employer eventually fulfills its side of the bargain. That sort of delay is
inconsistent with clear statutory language that the covenant must be enforceable “at the time the agreement is
made.” While I agree with the Court that “at the time” does not require an instantaneous exchange of consideration,
neither does the statute permit the employer’s promise to hang in the air, indefinitely, until it “becomes enforceable”
by performance. Rather, consistent with Light and with the statute, I would hold that the employer’s exchange of
consideration must occur within a reasonable time after the agreement is made. Because that condition was
satisfied on this record, I concur in the judgment.

Justice Wainwright delivered a concurring opinion

Sheshunoff Mgmt Serv's v. Johnson, Strunk & Assoc. (Tex. Oct 20, 2006)(concurrence by Justice Wainwright)

Today, the Court modifies its interpretation in Light v. Centel Cellular Company of the Covenants Not to Compete
Act. See 883 S.W.2d 642 (Tex. 1994); Tex. Bus. & Com. Code §§ 15.50–.52. The at-will employee in this case,
Kenneth Johnson, asserted that a noncompete agreement was unenforceable under Light’s construction of
subsection 15.50(a) of the Act because no consideration was exchanged at the time the parties entered into the
agreement. Contrary to Light, the Court holds that Johnson became bound by his promise not to compete when his
employer later performed its corresponding promise to provide special training in its business methods and
confidential information. This is similar to a unilateral contract under the common law and seems to address the
Legislature’s purpose. I join most of the Court’s opinion.

Both the confidentiality agreement and the noncompete are part of Johnson’s employment agreement. I would hold
that the covenant not to compete is enforceable on the ground that it is ancillary to the otherwise enforceable
confidentiality agreement.

In Re Wilson Constr. Co. (Tex. June 30, 2006)(Justice Willett)
[arbitration, interlocutory appeals ILA or mandamus?]
http://www.supreme.courts.state.tx.us/Historical/2006/jun/050326.htm
05-0326 IN RE D. WILSON CONSTRUCTION COMPANY, ET AL.; from Cameron County; 13th district (13 04 00333
CV, ___ SW3d ___, 02 10 05)
The Court conditionally grants the petition for writ of mandamus.
Justice Willett delivered the opinion of the Court, joined by Chief Justice Jefferson, Justice Hecht, Justice O'Neill,
Justice Wainwright, Justice Medina, Justice Green, and Justice Johnson
- consolidated with -
05-0327 American Stamdard and the Trane Company, et al. v. Brownsville I.S.D.
http://www.supreme.courts.state.tx.us/Historical/2006/jun/050326.htm
from Cameron County; 13th district (13 04 00184 CV, ___ SW3d ___, 02 10 05)
The Court dismisses the petition for review as moot.
(“In this consolidated proceeding, we decide whether the court of appeals had jurisdiction over an interlocutory
appeal under the Texas Arbitration Act and whether the parties’ arbitration agreements are ambiguous. We hold
that the court of appeals had jurisdiction over the interlocutory appeal and that the agreements are not
ambiguous.”)
Justice Brister delivered a concurring opinion
http://www.supreme.courts.state.tx.us/Historical/2006/jun/050326c.htm
(“I agree that the court of appeals erred in dismissing the petitioners’ interlocutory appeal, and join in the Court’s
judgment. I disagree that we should continue requiring litigants to pursue parallel mandamus and interlocutory
appeal proceedings in arbitration cases. This unnecessary duplication makes arbitration more cumbersome and
costly than other cases, rather than the “simplicity, informality, and expedition” intended for them. Mitsubishi Motors
Corp. v. Soler Chrysler Plymouth, Inc., 473 U.S. 614, 628 (1985). An interlocutory appeal is proper to enforce
arbitration agreements under the Texas Arbitration Act. See Tex. Civ. Prac. & Rem. Code § 171.098. Mandamus is
proper to enforce arbitration agreements under the Federal Arbitration Act. See In re Weekley, 180 S.W.3d 127,
130 (Tex. 2005) ... Parties should not have to file both an interlocutory appeal and an original proceeding; even
attorneys who can predict which one an appellate court will find proper may hesitate to gamble with their client’s
money. I would allow them to file either, and then have the appellate courts treat it as they think proper.”)

Cooper Tire v. Mendez (Tex. June 16, 2006)(Justice Willet)
[products liability, auto tire, nail in tire, deadly accident caused by tire failure]
04-1039 COOPER TIRE & RUBBER COMPANY v. OSCAR MENDEZ, JR., ET AL.; from El Paso County; 8th district
(08 01 00340 CV, 155 SW3d 382, 10 14 04)
The Court reverses the court of appeals' judgment and renders judgment.
Justice Willett delivered the opinion of the Court
(“In this products liability case, we hold that plaintiffs’ expert testimony was legally insufficient to establish a
manufacturing defect, and accordingly reverse and render judgment in favor of petitioner Cooper Tire & Rubber
Company.”)

Willis v. Urban Retreat of Houston (Tex. June 2, 2006)(Justice Willett)
[no liability of owners in breach of contract claim against closely held corporation]
04-0409 MICHAEL T. WILLIS, FRANCIE WILLIS, URBAN RETREAT OF HOUSTON, INC., AND WILLIS HITE
ENTERPRISES, INC. v. DAN DONNELLY; from Harris County; 14th district (14-00-00569-CV, 118 SW3d 10, 06 19
03) 2 petitions
The Court reverses in part and affirms in part the court of appeals' judgment, and renders judgment in part and
remands, in part, the case to the trial court. Justice Willett delivered the opinion of the Court
(Justice O'Neill, Justice Brister, and Justice Medina not sitting)
(“This dispute centers on whether shareholders in closely held corporations can be held liable to an individual who
agreed to a contractual business arrangement with the corporations. We agree with Petitioners Michael and
Francie Willis (the Willises) that they cannot be held liable to Respondent Dan Donnelly under breach of contract
and breach of fiduciary duty theories. We address other issues as well.”)

DISSENTS AND CONCURRENCES BY JUSTICE WILLETT

Ben Bolt-Palito Blanco Consolidated ISD v. Texas Political Subdivision Self-Insurance Fund,
No. 05-0340 (Tex. Dec. 29, 2006)(Majority opinion by Justice O’Neill)
[sovereign immunity, new statutory waiver applies]
BEN BOLT-PALITO BLANCO CONSOLIDATED INDEPENDENT SCHOOL DISTRICT v. TEXAS POLITICAL
SUBDIVISIONS PROPERTY/CASUALTY JOINT SELF-INSURANCE FUND; from Jim Wells County; 4th district (04 04
00658 CV, 163 SW3d 172, 03 09 05)

The Court reverses the court of appeals' judgment and remands the case to the trial court.
Justice O'Neill delivered the opinion of the Court, joined by Chief Justice Jefferson, Justice Wainwright, Justice
Brister, Justice Medina, and Justice Johnson
Because Section 271.152 of the Local Government Code waives the Fund’’s immunity from Ben Bolt’’s claim arising
out of the insurance agreement between the parties, we reverse the court of appeals’’ judgment and remand to the
trial court for further proceedings.

Justice Willett delivered a dissenting opinion, joined by Justice Hecht

(Justice Green not sitting)