Five Pointers for Enforcing a Non-Compete Agreement in Texas

Gold five under spotlight

Under Texas law, for a non-compete agreement to be enforceable, it must meet strict requirements as to timing, geography, and the type of conduct that it prohibits.

June 8, 2020
Kristopher M. Stockberger - The Grindstone Lewis Brisbois' Labor & Employment Blog

1. The Devil’s in the Details

Under Texas law, for a non-compete agreement to be enforceable, it must meet strict requirements as to timing, geography, and the type of conduct that it prohibits. While courts have enforced agreements for between one and two years, your situation could be subject to a shorter time period. If the geographical scope of the agreement is too broad or vague, that could render the agreement unenforceable. Also, the type of conduct prohibited by your agreement should be tied to the specifics of your business, because categorical barriers to other employment are often not enforced. If an employer knowingly instructs an employee to enter an overbroad non-compete agreement, the employer runs the risk of paying the employee’s attorneys’ fees.

2. Timing on the Front End

If an employee has been with an employer for years and the employer suddenly decides to have her sign a non-compete without any other meaningful change in the employee’s role, then the agreement will probably not be enforceable, unless the employee receives “consideration.” In this context, consideration is something of value, other than money or benefits, which the law deems to warrant protection by a non-compete agreement. For example, allowing an employee to learn the secret formula to Coca-Cola or to gain access to an employer’s confidential financials constitutes legally sufficient consideration given to an employee in exchange for the employee’s promises in a non-compete agreement.

Mr. Stockberger may be contacted at Kris.Stockberger@lewisbrisbois.com



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