Public opinion in recent years has increasingly turned against the use of non-compete agreements between employers and their employees. On May 30 of this year, General Counsel Jennifer Abruzzo of the National Labor Relations Board claimed that non-compete agreements violate labor law unless falling within a narrow set of circumstances where the employee’s rights would not be harmed. Further, California has already outlawed the use of non-compete agreements, while New York finds them unenforceable unless multiple specific requirements are met.

In Texas, a non-compete agreement does not have the hoops to jump through that one would in New York. Instead, non-compete agreements in Texas must only be (1) part of or supplemental to an otherwise enforceable agreement, and (2) reasonable.

The first portion of this essentially requires the non-compete agreement itself to be part of or related to an employment contract. The second requirement, reasonableness, has been interpreted by the Supreme Court of Texas to be a balancing test between the protections of the non-compete to the employer and the hardship imposed upon the employee.

Because of this, from an employer’s prospective, a non-compete agreement must be drafted carefully. If the agreement is not ancillary to or included within an otherwise enforceable agreement, it will not be upheld. A non-compete agreement on its own, even if offered in exchange for incentives, is improper and Texas law will override it. Additionally, while it might be advantageous to prevent former employees from battling you for future business, the restraint on their ability to work should be limited. Non-compete agreements are not meant to punish an employee for leaving and should instead be drafted only to protect your business from unfair influence.

On the other page, if you signed a non-compete agreement with your employer and now want to leave in favor of another opportunity in conflict with that agreement, you might not be out of luck. Contesting the validity of a non-compete agreement relies on proving that one of the above-mentioned factors about the agreement you signed are lacking. Usually this is shown with unreasonably restraining requirements that limit how or where you can work after leaving.

Waldron & Schneider boasts a team of experienced lawyers well equipped to help you succeed no matter the area of non-compete agreements you fall within. If you are hoping to contest or enforce a non-compete, our team of experienced litigators is prepared to fight for you in the courtroom. If you are instead hoping to include in your employment contracts a non-compete agreement that will protect your company from former employees, our corporate lawyers are experienced with drafting enforceable non-compete agreements that will provide you with reassurance.

Call our office to schedule a meeting with an attorney who can find you the help you need today.

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