Alex Sheshunoff Management Services, L.P. v. Johnson

In Alex Sheshunoff Management Services, L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006), the court examined the enforceability of a non-compete covenant under which the employer had no corresponding enforceable obligation at the time the agreement was made--instead, the employer's obligations were only triggered by its performance some time after the execution of the agreement. (Id. at 650-51.) The employee argued that the non-compete covenant was invalid because there was no "otherwise enforceable agreement at the time the agreement was made" as required by Tex. Bus. & Com. Code section 15.50(a). (Id. at 650.) The supreme court disagreed with the employee's interpretation of the statute: "Revisiting the issue of what the clause "at the time the agreement is made" in the Act means, we conclude that we must disagree with Light's view that a unilateral contract can never meet the requirements of the Act because such a contract is not immediately enforceable when made. Section 15.50 states that "a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made . . . ." Simply reading the text, the clause "at the time the agreement is made" can modify either "otherwise enforceable agreement" or "ancillary to or part of." . . . We now conclude, contrary to Light, that the covenant need only be "ancillary to or part of" the agreement at the time the agreement was made. Accordingly, a unilateral contract formed when the employer performs a promise that was illusory when made can satisfy the requirements of the Act." (Sheshunoff, 209 S.W.3d at 651.) The supreme court stated that "ordinarily, the truest manifestation of what legislators intended is what lawmakers enacted, the literal text they voted on." "This enacted language is what constitutes the law, and when a statute's words are unambiguous and yield a single inescapable interpretation, the judge's inquiry is at an end." Id. at 651-52. Thus, "wherever possible," courts should "construe statutes as written"; only "where enacted language is nebulous" may courts "cautiously consult legislative history to help divine legislative intent." Id. at 652. The supreme court explained that it used the word "cautiously" because while it recognized that "the Code Construction Act expressly authorizes courts to use a range of construction aids, including legislative history," it was "mindful that over-reliance on secondary materials should be avoided, particularly where a statute's language is clear." Id. at 652 n.4. According to the court, "if the text is unambiguous, we must take the Legislature at its word and not rummage around in legislative minutiae." Id.