Last week, the Fifth Circuit Court of Appeals halted the implementation of OSHA’s Covid-19 vaccine mandate in Texas, Mississippi and Louisiana, but some employers choose to require vaccination from their employees in Texas. Those who refuse, may be terminated. If they have a non-compete agreement with their employer, assuming the agreement meets the appropriate legal requirements, i.e., among other things, is reasonable, has geographic, scope and term restrictions, and is supported by consideration, the fact that the employee was terminated or quit over the COVID-19 vaccine requirement, is not going to make the agreement invalid.
Thus, Texas employees may be terminated over the refusal to get COVID-19 vaccination and still be bound by a non-compete agreement.
Earlier this year, a Texas legislator, Rep. Cody Harris, introduced a bill that would make non-compete agreements unenforceable if an employee or an independent contractor was terminated by his or her employer for refusing a COVID-19 vaccine, but the bill died in the legislature, and is not likely to pass next year if introduced again, given Texas’ pro-employer stance when it comes to non-competes.
The bill would have amended the Texas Covenants Not to Compete Act by adding the following section:
(D) A COVENANT NOT TO COMPETE BETWEEN AN EMPLOYEE AND AN EMPLOYER IS NOT ENFORCEABLE AGAINST AN EMPLOYEE WHO IS DISCHARGED FROM EMPLOYMENT WITH THE EMPLOYER SOLELY BECAUSE THE EMPLOYEE REFUSED OR FAILED TO RECEIVE A COVID-19 VACCINATION REQUIRED BY THE EMPLOYER. FOR PURPOSES OF THIS SUBSECTION:
(1) “COVID-19” MEANS THE 2019 NOVEL CORONAVIRUS DISEASE.
(2) “EMPLOYEE” MEANS AN INDIVIDUAL WHO IS EMPLOYED BY AN EMPLOYER FOR COMPENSATION.
(3) “EMPLOYER” MEANS A PERSON WHO EMPLOYS ONE OR MORE EMPLOYEES.
In other jurisdictions, a termination for refusal to get COVID-19 vaccine may serve as grounds for the nullification of non-compete restraints. For more information, see my prior post on this here.
CONCLUSION: While being fired for refusal to obtain COVID-19 vaccine does not automatically nullify non-compete restraints for employees in Texas, employers should obtain legal advice before terminating employees who have access to their trade secrets to ensure that such information is adequately protected. Employees, likewise, should seek advice regarding the enforceability of their non-compete agreements, as factors related to their termination may affect whether their post-employment restraints remain valid.
Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice. Her practice includes commercial, intellectual property and employment litigation. You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108 or fill out the form below.