THE VET
Employee, a veterinarian licensed in Texas, enters into a contract of employment on with Employer. Also a licensed veterinarian, Employer owns and operates two animal clinics in the Dallas-Fort Worth (DFW) area. Employer hires Employee to manage and to provide veterinary services at his Pethouse Pet Clinic in Arlington, Texas. (Employer himself manages a second animal clinic in Plano, Texas, about 40 miles away.) At the time Employee is hired, the Pethouse clinic has been in operation for 15 years and has a large and stable customer base. Employee has moved from Amarillo—where his own practice had not been terribly successful—to take the job. The contract provides Employee with a base salary, plus a bonus based on the profitability of the Pethouse Pet Clinic. The contract provides that either party may terminate the agreement upon 120 days’ notice to the other party. The written employment contract also contains the following provisions: Voluntary Termination. (a) Employee agrees that upon his voluntary termination of the Employee-Employer relationship, Employee will not practice veterinary medicine in Arlington, Texas or within a ten (10) mile radius of the Pethouse Pet Clinic in Arlington [which is 1007 North Cooper Street, Arlington, Texas] for a period of three (3) years. (b) Employee agrees not to advertise within the City of Arlington his departure from the Pethouse Pet Clinic or send any written announcements or announcements of any sort notifying clients that he is leaving the practice of veterinary medicine at the Pethouse Pet Clinic. (c) Employee further agrees that he will not notify present or past clients of the Pethouse Pet Clinic of new location within three (3) years after his voluntary termination. Each year the contract is renewed with a change in the compensation scheme, increasing Employee’s salary and adding a provision giving him a percentage of the profits. Otherwise, each the new contract is identical to the first, particularly with regard to the noncompete clause. After practicing at Employer’s clinic for five years and becoming popular with Pethouse customers, Employee resigns to go to work for more money at Pethouse’s major competitor, Furry Friends Animal Care. Furry Friends is approximately 2.2 miles from Pethouse Pet Clinic. Employee immediately sends notice of his new position to all of his patients (or, rather, their owners) from Pethouse and Furry Friends takes out advertisements in Mid-Cities Magazine, the Fort Worth StarTelegram, and the Dallas Morning News –all of which circulate in Arlington, Texas, announcing Employee’s new position with Furry Friends.
Employer sues to enforce the covenant. What are the arguments for and against its enforcement?
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THE VETERAN
Employee, a Texas-licensed veterinarian, signs an employment contract with Employer. Employer, who is also a qualified veterinarian, owns and operates two animal clinics in the Dallas-Fort Worth (DFW) area. Employer hires Employee to manage and offer veterinary services at his Arlington, Texas-based Pethouse Pet Clinic. (The employer runs a second animal clinic around 40 miles away in Plano, Texas.) The Pethouse clinic has been in operation for 15 years and has a strong and stable customer base at the time Employee is employed. Employee relocated from Amarillo, where his previous practice had not been particularly successful, to take the job. Employee will be paid a base wage plus a bonus dependent on the profitability of the Pethouse Pet.
