Noncompete Agreements in Texas
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“Is my Texas non-compete agreement enforceable?”
This is a question routinely asked by both employers and employees. Texas law disfavors contracts that restrict employee mobility. Texas courts acknowledge the substantial economic benefit in allowing people to change jobs and industries. But Texas law also recognizes that employers have valid interests–such as protecting their trade secrets and goodwill.
Balancing these interests, Texas law allows for non compete agreements in some circumstances. A properly-worded noncompete – one which is related to a legitimate interest, such as trade secret protection, and which is reasonable in scope – can be enforceable. Even if a particular noncompete is enforceable, though, a court may decide not to force an employee to comply with it. The particular details of each agreement, and each situation, must be evaluated.
If you are party to a noncompete agreement, or have a legal matter involving a noncompete in Texas, contact us today.
Browse Texas noncompete and contract dispute articles, written by Attorney Robert Wood:
February 3, 2017 / By Robert Wood
Noncompete Agreements in Texas
Many noncompete cases are filed after an employer learns that an ex-employee is violating his covenant not to compete. Sometimes, an ex-employee competes for several months before an employer discovers that the ex-employee is doing so. This is especially possible in an age in which much commerce is done via the internet. Thus, by the…
January 25, 2017 / By Robert Wood
Noncompete Agreements in Texas
Under Texas law, parties may only be entitled to recover their attorneys’ fees if permitted by statute, by a contract between the parties, or under equity. At times, there may be multiple avenues for a prevailing party to receive attorneys’ fees. However, at other times, a statute may preempt, or override, every other avenue to…
October 17, 2016 / By Robert Wood
Articles // Noncompete Agreements in Texas
Worldwide Geographic Restriction of Texas Noncompete Agreements May Be Enforceable Last revised: 10.17.16 In the past, Texas courts have not fully embraced the ability of a non-compete agreement to restrict an employee from working anywhere in the world. In several cases, Texas courts have held that the proper geographic scope of a noncompete agreement is…
September 9, 2016 / By Robert Wood
Articles // Noncompete Agreements in Texas
I’m periodically contacted by an employee who says to me: My employer fired me. That means my noncompete goes away, right? Not exactly. There is no rule in Texas stating that if an employee is fired, rather than quits, a noncompete agreement that he signed goes away. The reason for this is simple: the consideration…
August 21, 2016 / By Robert Wood
Articles // Noncompete Agreements in Texas
Does the Texas noncompete statute apply to independent contractors as well as employees? Although there is not much case law on this, the answer is almost certainly yes. One case in particular out of the Fort Worth Court of Appeals dealt with a noncompete agreement dispute involving an independent contractor. Neither the company attempting to…
June 6, 2016 / By Robert Wood
Articles // Noncompete Agreements in Texas
An oral contract is as good as the paper it is written on. This is simply not true. In fact, a Texas jury awarded $11 billion dollars in damages to Pennzoil when Texaco interfered with an oral contract for the sale of Getty Oil to Pennzoil, one of the largest jury verdicts in U.S. history. While…
March 2, 2016 / By Robert Wood
Articles // Noncompete Agreements in Texas
In recent years, Texas courts have shown support for the employer’s use of non-compete agreements. The courts have done so by finding certain requirements of enforceability implied in non-compete agreements in some circumstances. Despite this trend, in June 2015, the federal appellate court that covers Texas ruled that a duty to keep information confidential cannot…
February 26, 2016 / By Robert Wood
Articles // Noncompete Agreements in Texas
A Texas appellate court recently addressed the question of whether money is sufficient to support a non-compete agreement. The court ruled that money was not enough and that the non-compete’s purpose must be to protect a legitimate business interest. The contract at issue was for a company (“Company A”) to provide hospitalist services and to…
November 25, 2015 / By Robert Wood
Articles // Noncompete Agreements in Texas
As readers of this blog know, noncompete agreements are increasingly enforceable in Texas. However, even in Texas, not all noncompete agreements comply with the statutory requirements. In a case decided a few months ago, the United States Court of Appeals for the Fifth Circuit, applying Texas law, held that a particular noncompete agreement was unenforceable. …
July 15, 2015 / By Robert Wood
Articles // Noncompete Agreements in Texas
Employees seeking to avoid a non-compete agreement when ending an employment relationship should ensure that their former employer explicitly releases them from the agreement. Such was the case in Try Hours, Inc. v. Douville, 2013 WL 139584 (Ohio App. 2013). In Try Hours, Inc., the Sixth Appellate District of the Ohio Court of Appeals held…