Non-compete agreements restrict a former employee from working for a competitor for a certain period of time after they leave the company. They are commonly used in employment and business relationships to protect confidential information, customer relationships, and other competitive advantages built by a business.
Non-compete agreements can limit a person’s ability to work and are often subject to legal challenges. Texas law places certain restrictions on how they can be enforced, and in some instances, seeking guidance from a business litigation attorney in Houston can help protect yourself and your rights.
What Is a Non-Compete Agreement?
A non-compete agreement is a contract that limits a person’s ability to engage in certain competitive activities after leaving a job or business relationship. These agreements are often included in employment contracts, partnership agreements, or the sale of a business.
In Texas, non-compete agreements must satisfy several legal requirements to be enforceable.
In general, the agreement must:
- Be part of an otherwise valid contract
- Protect a legitimate business interest
- Contain reasonable restrictions on time, geographic area, and scope of activity
Courts will not enforce non-compete agreements that impose broad restrictions or that go beyond what is necessary to protect the employer’s business interests.
What Can Happen if a Non-Compete Agreement Is Violated?
If an employer believes a former employee violated a non-compete agreement, the employer may pursue legal action to enforce the contract. For example, the employer may pursue a court order preventing the employee from engaging in further competitive activity.
If granted, the court may require the former employee to stop working for a competitor or cease certain business activities. Additionally, an employer may seek financial damages if the alleged violation caused economic harm to the business.
Can a Non-Compete Agreement Be Challenged?
Not all non-compete agreements are enforceable. Texas courts frequently review these agreements to determine whether the restrictions are reasonable and necessary to protect a legitimate business interest.
A non-compete agreement may be challenged if it:
- Restricts competition for an unreasonable amount of time
- Covers an overly large geographic area
- Prevents the employee from working in an entire industry
- Is not tied to a valid employment or business agreement
Texas courts also have the authority to modify overly broad agreements to make them reasonable rather than voiding them entirely.
Speak With a Texas Business Litigation Attorney for Help
Non-compete disputes can have significant consequences for both employers and employees. If you are subject to a non-compete, an attorney can review the language of the agreement to determine whether it complies with Texas law.
If your agreement is overly broad or improperly drafted, your attorney may challenge its enforceability in court or seek to have the restrictions narrowed. In some cases, your legal team can also negotiate a resolution with your employer that allows you to continue working and avoid further dispute.
If you are facing a dispute involving a non-compete agreement, you should contact an experienced Houston business litigation attorney for help understanding your rights and legal options. Porter Law Firm can help you protect your interests. Call today to schedule a confidential consultation.