Bill Text: TX HB1522 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to a prohibition against covenants not to compete for independent contractors in connection with oil and gas operations.

Spectrum: Bipartisan Bill

Status: (Introduced) 2019-03-25 - Left pending in committee [HB1522 Detail]

Download: Texas-2019-HB1522-Introduced.html
  86R5653 GRM-F
 
  By: Paddie H.B. No. 1522
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a prohibition against covenants not to compete for
  independent contractors in connection with oil and gas operations.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 15.50(a), Business & Commerce Code, is
  amended to read as follows:
         (a)  Notwithstanding Section 15.05 of this code, and subject
  to any applicable provision of Subsection (b), 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 to the
  extent that it contains limitations as to time, geographical area,
  and scope of activity to be restrained that are reasonable and do
  not impose a greater restraint than is necessary to protect the
  goodwill or other business interest of the promisee, except as
  provided by Section 15.501.
         SECTION 2.  Subchapter E, Chapter 15, Business & Commerce
  Code, is amended by adding Section 15.501 to read as follows:
         Sec. 15.501.  PROHIBITION AGAINST CERTAIN COVENANTS NOT TO
  COMPETE IN CONNECTION WITH OIL AND GAS OPERATIONS. (a)  In this
  section:
               (1)  "Downstream oil and gas operation" means an
  activity associated with the processing and refining of oil and gas
  into petroleum products and the distribution, marketing, and
  shipping of those products, including safety-related activities.
               (2)  "Midstream oil and gas operation" means an
  activity associated with the transportation, processing, and
  storage of oil and gas between the upstream oil and gas operation
  and the downstream oil and gas operation, including safety-related
  activities.
               (3)  "Upstream oil and gas operation" means an activity
  associated with the exploration, development, production,
  processing, and transportation of oil and gas, including drilling,
  hydraulic fracture stimulation, completion, maintenance,
  reworking, recompletion, disposal, plugging and abandonment,
  secondary and tertiary recovery, and remediation or safety-related
  activities.
         (b)  An entity engaged in a downstream, midstream, or
  upstream oil and gas operation may not require an independent
  contractor with whom the entity contracts to enter into a covenant
  not to compete that restricts the independent contractor from
  performing work or providing a service for another entity engaged
  in a downstream, midstream, or upstream oil and gas operation.
         (c)  A covenant not to compete described by Subsection (b) is
  void and unenforceable.
         (d)  Section 15.51 does not apply to a covenant not to
  compete described by Subsection (b).
         SECTION 3.  Section 15.52, Business & Commerce Code, is
  amended to read as follows:
         Sec. 15.52.  PREEMPTION OF OTHER LAW. The criteria for
  enforceability of a covenant not to compete provided by Sections
  [Section] 15.50 and 15.501 of this code and the procedures and
  remedies in an action to enforce a covenant not to compete provided
  by Section 15.51 of this code are exclusive and preempt any other
  criteria for enforceability of a covenant not to compete or
  procedures and remedies in an action to enforce a covenant not to
  compete under common law or otherwise.
         SECTION 4.  The change in law made by this Act applies only
  to a covenant entered into on or after the effective date of this
  Act. A covenant entered into before the effective date of this Act
  is governed by the law in effect on the date the covenant was
  entered into, and the former law is continued in effect for that
  purpose.
         SECTION 5.  This Act takes effect September 1, 2019.
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