“I don`t even remember ever signing a non-contest.” To be enforceable, as we mentioned above, a Texas competition waiver agreement must also be appropriate in the way it restricts a former employee. The requirement of the “otherwise enforceable agreement” simply means that both parties must have made binding commitments. In the 1990s and 2000s, the question of whether there was an “otherwise enforceable agreement” was the subject of much dispute. This was especially true for an employee after approval. Due to the controversy surrounding non-compete obligations, a number of states have made them illegal in recent years, including Oklahoma and North Dakota. California also allows non-compete obligations only in exceptional circumstances, which has helped promote the state`s technology sector. However, that changed in 2006 when the Texas Supreme Court released its Sheshunoff statement. There, the court ruled that a promise made to an approved employee can be part of a valid agreement as soon as the consideration has actually been provided. This was an important decision that excluded a significant number of potential disputes related to the timing of a non-compete obligation. For example, employment by mutual agreement is generally not a binding agreement, but courts have concluded that employers who give employees access to proprietary information are sufficiently considered to make the non-compete obligation enforceable in Texas. While Texas courts tend to favor job mobility, it can still be difficult to get out of a non-compete clause in Texas. Decision: The right of first refusal in the asset purchase agreement, which prohibited a party from carrying on a business without offering another party the right to be a partner in the company, was a “business restriction” subject to the Texas Covenants Not to Compete Act.
There are no fixed rules regarding the field of activity, but cases have shown that courts are less likely to apply non-compete obligations that prevent an employee from working with clients with whom he or she has not had contact during his or her employment. However, companies can usually prevent any contact with existing customers. Non-compete obligations may prevent an employee from working for competitors, but time and geographic restrictions must always be reasonable for the agreement to be considered valid. If you are a party to a non-compete agreement or have a legal question regarding a non-compete agreement in Texas, contact us today. What does this mean in practice? To be enforceable, based on Texas law and jurisprudence, the following must apply to a non-compete obligation: Non-compete obligations have caused a lot of controversy in recent years. In the past, these agreements were mainly part of the employment contracts of managers or employees with access to trade secrets. Recently, however, low-level employees have also been asked to sign restrictive agreements such as non-compete obligations. While a number of states have made non-compete obligations illegal or severely restricted their use, Texas has generally gone in the opposite direction, facilitating the enforcement of non-compete obligations. I have spent much of my 27-year legal career drafting and analyzing non-compete rules in Texas. Since 2007, I`ve written hundreds of articles about the Texas non-compete clause on my blog TexasNonCompeteLaw.com.
If you have any questions about a non-compete agreement in Texas, please do not hesitate to contact me. .