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Non-Compete Agreements

Non-Compete Agreements

One of the growing issues in the employment arena is the use of, and enforceability of, non-compete agreements by employers.  Many employers require their employees to sign these agreements in an attempt to prevent their employees from leaving the job and taking with them information on customers or secrets about certain products, which can be used by a competitor.  Employers usually require employees to sign such agreements at the beginning of their employment, but occasionally such requests are made after the employment relationship has begun.  These agreements usually state that when the employee leaves the employment of the company, he or she is not allowed to work for a competitor, (in the region the employee has worked), for a certain period of time, (usually anywhere from six months to three years).

The Texas Courts and Legislature traditionally viewed such agreements with some disdain, as they restrict the rights of citizens to freely ply their trade, but recent court decisions have allowed these agreements to become more enforceable.  However, the law requires a company to demonstrate a legitimate interest in protecting its secrets and customer information from persons who would could use the information and obtain an unfair competitive advantage. The recent balance struck by the courts and the legislature in Texas on this issue is that a non-competition agreement will be carefully scrutinized, and will only be enforceable within a normal employment relationship as long as the time and geographic restrictions are limited to only that which is necessary to obtain adequate protection. This area of the law is extremely complex, and constantly evolving; thus, it is impossible to provide a complete explanation of the law in this web site.

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