Question

1. Jon, a salesman for Acme Widget Company, signed a contract with this clause: "Employee agrees that on termination of the employment relationship he will not go to work for another widget company within a 200-mile radius of Austin, TX. Jon's sales territory was Travis, Williamson, and Bastrop Counties. He quit work pursuant to a job offer from Smith Widget Co., located in the city of Boerne, TX. Acme sought an injunction to prohibit this. Read Morrell Masonry Supply Co.v. Coddou, 2014 WL 1778285. In light of that case, is the clause enforceable? (a) yes, if it is easily identifiable in the contract; (b) only if Jon had read and understood it before signing the contract; (c) yes, because it is in a written contract; (d) no.

Answer 1

Answer) (d) No

Reason) In Morell-Masonry vs Coddou case, Morell Masonry had stated in an employment agreement with Coddou he cannot work anywhere within the entire state of Texas for a period of one year prior to termination of his employment. Later Coddou got fired. He joined another firm in Texas and when Morell Masonry sued him for breach of contract, Coddou filed a matter -of -law summary-judgment motion saying that the restriction to all of the texas is unreasonable and unenforceable. In the court, Coddou stated that he never did business outside Houston and Beaumont and Morell- Mason was not able to prove their point that Coddou did sales throughout Texas. This led to Coddou winning the case.

In this case, however, the employer has stated that Jon cannot work for another widget company within a 200-mile radius of Austin, Texas. Jon's sales territories were much smaller than the whole state. A clause covering the whole of Texas or just one city of Texas, both are unreasonable if the employee's sales area is small and limited. Also, the city where Jon took a job was Boerne and not Austin. Hence Acme Widget Company cannot enforce this clause on Jon.