Opinion ID: 2391841
Heading Depth: 1
Heading Rank: 4

Heading: Limitations as to Time and Territory.

Text: The court held that the limitations as to time, territory and activity in the covenant not to compete were unreasonable. I agree that the area of restraint in the covenant is greater than is reasonably necessary to protect Mobile Auto Trim. However, after reforming the area limitation to enjoin Hill from competing with Mobile in his assigned two-county area and from contacting any car dealership managers in the assigned seven-county area that he had prior contacts with as a franchisee, the limitations are reasonable. The problem is the court's refusal to follow well established precedent and reform the covenant to impose reasonable limitations. The court correctly states that [i]n the past this court has modified restrictive covenants in order to make the time, area and scope of the covenant reasonable. 725 S.W.2d 172 (emphasis added). However, the court then concludes, based on a skimpy record, that the covenant not to compete is void. The implication is that such covenants will not be modified by the court's equity powers in the future. The long-standing practice of Texas courts is to reform covenants not to compete and enforce those covenants to the extent that the restraint imposed is reasonable. See Matlock v. Data Processing Sec., Inc., 618 S.W.2d at 329; Justin Belt Co. v. Yost, 502 S.W.2d at 685; Weatherford Oil Tool Co. v. Campbell, 340 S.W.2d at 952; Dittmer v. Source EDP, Texas, Inc., 595 S.W.2d at 881-82. See also Spinks v. Riebold, 310 S.W.2d at 669 (courts will not declare void unreasonable restraints but rather will enforce only the reasonable portions). This approach is also adopted by the Restatement. Restatement (Second) of Contracts § 184 comment b (1979). See 6A Corbin on Contracts § 1390, at 70-71 (1962); 14 S. Williston, A Treatise on the Law of Contracts § 1647C, at 293 (3d ed. 1972). Texas courts should continue this practice. Because Hill is not prohibited from providing for his family in his home county or elsewhere by working for a body shop or car dealer as long as he does not call on car dealers and make car trim repairs from a mobile van, the covenant not to compete is reasonable as reformed.