Are non-complete agreements enforceable in Texas?

A company in Texas may ask an employee to sign a non-compete agreement as a condition of employment. However, there may be limitations as to what can be included in the agreement. Typically, courts prefer that competition is increased in the marketplace instead of restricted. Therefore, a business may need to prove that it would be harmed if the non-compete agreement was not put into effect.

In addition to proving that the non-compete is vital to protecting a business interest, it may not be so broad as to prevent a professional from finding work. The common calling doctrine holds that a non-compete is typically not needed when an employee only has a general knowledge about a particular company or industry. Employers should be aware that a non-compete clause is only enforceable if it is part of an employment agreement or another type of enforceable agreement.

For a Texas employer, it may be easier to have an employee sign a non-disclosure or confidentiality agreement. This merely limits what an employee is allowed to talk about with competitors for a certain amount of time. It typically does not expressly limit where an individual can work or for whom that individual may work for. It is also considered to be easier to enforce in court.

Before an employee signs a non-compete agreement, it may be worthwhile to talk to a business law attorney who may be able to determine if the agreement is too restrictive relative to what the employee is doing for the company. An attorney may also be able to provide employment litigation advice to those who wish to find work in spite of a non-compete agreement that he or she signed.

Source: Texas Workforce Commission, “Conflict of Interest, Trade Secrets, Non-Competition Agreements“, December 02, 2014

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