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Does Texas Allow Non Compete Agreements

The Texas non-compete clause lists several areas in which adequacy must be assessed: time, geographic area and scope of activity, which must be limited. Time, geographic space and activity limits are defined by the courts and each case must be considered individually. The application of a non-compete agreement assumes that it is considered unfair to the worker; Otherwise, the court may either refuse the execution or limit its scope and duration. But as an employer, you have the right to take all legal measures to protect yourself. If you need help developing a non-compete agreement or enforcing an agreement with a former employee, talk to an experienced and experienced Bennett Weston lawyer who is seeking advice. A court will not apply a non-competition agreement if the time frame in the agreement is too long. How long is it too long? It usually depends on a number of factors. What may be useful in some sectors or trades may be unreasonable in others. This is an area in which experienced legal advice can be invaluable. But things are changing. The Texas courts have begun to see a non-compete agreement in a more favourable light.

This has strengthened the applicability of non-competition agreements. But there are still some obstacles. To be applicable, the agreement must be supported by a valid consideration and restrictions on workers must be proportionate with respect to the limitation of activities, the duration of the agreement and its geographical scope. In terms of geographic scope, non-competition prohibitions are more likely to be applied in court if they do not limit a worker beyond the areas in which he or she has actually worked for the employer attempting to enforce the agreement. Restrictions that go beyond these geographic areas are generally considered inappropriate. Under Texas law, non-compete agreements must be part of an otherwise valid employment contract and are enforceable only if they are appropriate and do not impose greater restrictions on a worker than is necessary to protect the legitimate interests of the company. Common sense is therefore the key to a valid non-competition agreement. Under the statute, the consideration given by the employer (1) must have the employer`s interest in being able to deter the worker from competition and (2) the contract must be aimed at enforcing the worker`s promise of return. The clearest type of consideration for this requirement is an employer`s promise to provide the worker with confidential information or trade secrets in exchange for the employee`s commitment not to disclose that information.

Therefore, if the employer asks its creditors to sign a non-competition, but never shares confidential information with them, a court will likely say that the employer has no interest to protect and will not enforce the agreement. But that changed in 2006, when the Texas Supreme Court issued its opinion of Sheshunoff.