Opinion
Civil Action No. 3:01-CV-2609-N
October 11, 2002
ORDER ON MOTION FOR SUMMARY JUDGMENT
Before the Court is Defendant J.H. Walker, Inc.'s ("JHW") motion for summary judgment on all claims asserted by Plaintiff Louisiana Transportation, Inc., Western American Division ("Western American"). For the reasons stated below, that motion is granted in part and denied in part.
JHW and Western American are motor carriers that provide trucking services through the use of independent truck owner/operators. Typically the owner/operators own their own trucks and lease them to carriers such as JHW and Western American. Western American acquired a truck terminal in Fort Worth in a transaction about October 13, 2000. Defendant Barbara Ann Race was an existing managerial employee at that terminal. Contemporaneously with Western American's acquisition of the terminal, Race signed an agreement styled "Confidentiality and Non-Competition Agreement." (the "Agreement") The Agreement provided that Race would not disclose confidential business information, would not solicit customers or employees, and that Michigan law would apply. Race received no independent consideration for entry into the agreement. Race subsequently went to work for JHW, and allegedly brought with her several of the independent owner/operators from Western American's Fort Worth terminal, who had valid and subsisting leases with Western American. Western American now sues JHW for tortious interference with the Agreement and with the leases of the owner/operators who followed Race to JHW.
This Court sitting in diversity applies the substantive law of the forum state. Texas views choice of law provisions in non-competition agreements as void as against public policy. DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990). Accordingly, Texas law applies to the Agreement. Although the provisions of the Agreement in paragraph 3 deal with restraints on soliciting customers and employees, rather than a pure covenant not to compete, Texas law treats restrictions on solicitation as non-competes. Miller Paper Co. v. Roberts Paper Co., 901 S.W.2d 593, 599-600 (Tex.App.-Amarillo 1995, no writ); American Express Financial Advisors, Inc. v. Scott, 955 F. Supp. 688 (N.D. Tex. 1996). To be enforceable, a covenant not to compete must be ancillary to an otherwise enforceable agreement at the time the agreement is made. TEX. BUS. COMM. CODE § 15.50(a) (Vernon Supp. 2001). An at-will employment contract alone cannot form the basis of the otherwise enforceable agreement, because the employer is under no obligation to continue employment so the consideration is illusory. Light v. Centel Cellular Co., 883 S.W.2d 642, 644-45 (Tex. 1994); Kadco Contract Design Corp. v. Kelly Services, Inc., 38 F. Supp.2d 489, 495-96 (S.D. Tex. 1998).
Here Race was an at-will employee. The Agreement recites that the consideration for the agreement was "employment and/or continued employment with" Western American. See Agreement ¶ 1. Under Light, that consideration fails and paragraph 3 of the Agreement is unenforceable. Accordingly, JHW cannot tortiously interfere with paragraph 3 of the Agreement, and its motion for summary judgment on Western American's claim for tortious interference with that paragraph is GRANTED.
The Court's review of the summary judgment proof indicates that there are fact questions on the balance of Western American's claims, and balance of JHW's motion for summary judgment is therefore DENIED.