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Is your non-compete agreement enforceable?

Texas employers have the right to protect their long-term interests by restricting the actions of their employees through non-compete agreements. The intent of a non-compete is to ensure that trade secrets and proprietary information does not leave when employees leave for other opportunities.

Non-competes differ on a case-by-case basis, but whatever type of contract you draft and have employees sign should meet the requirements necessary for enforceability. If your contract is not enforceable, it will not withstand scrutiny in the future, which could lead to legal complications and exposure of your company's secret information.

The components of a strong non-compete agreement

There are many factors that you should consider as you work with an attorney to draft an appropriate non-compete agreement. The elements of a strong non-compete agreement must include the following factors:

  • Protectable interests: Any non-compete must represent legitimate business interests. If an employee working for a competitor would not actually threaten your business interests, the agreement would likely not be enforceable.
  • Ordinary competition: In some cases, a highly skilled and knowledgeable employee working for the competition would be harmful for the former employer. However, non-competes cannot prohibit employees from taking only basic skills to a new employer.
  • Reasonable terms: In order to be enforceable, any non-compete should be reasonable and fair in its terms regarding period, scope and geography. A non-compete that unfairly restricts employees will likely not be enforceable.
  • Change in circumstances: If an employee's duties or job description changes over the course of his or her employment, the terms of the original non-compete may not be enforceable.
  • Signed contract: As with any other type of legal contract, if an employee does not sign the non-compete, it is not enforceable, no matter how many times it is discussed over the duration of the employment.

Simply having a non-compete agreement does not mean that it will be enforceable. In the drafting, signing and handling of disputes regarding these types of legal contracts, it can be useful to work with an attorney who can protect your business interests. Future success depends on what you do today, and shielding proprietary information can be a key component in this effort.

In the event that you believe a former employee violated the terms of a non-compete agreement, thereby threatening your business, you would be wise to take quick action to protect your interests. You may be able to stop the damage and find a positive solution with the help of an experienced legal ally.

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