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 - Dead) 2019-03-25 - Left pending in committee [HB1522 Detail]
Download: Texas-2019-HB1522-Introduced.html
86R5653 GRM-F | ||
By: Paddie | H.B. No. 1522 |
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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 | ||
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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. |