Breaking News: Texas Noncompetes Remain Enforceable as Federal Judge Halts FTC’s Noncompete Ban As a Texas attorney who frequently handles contract dispute matters involving non-compete agreements, one of the questions that I am asked more than any other (by both employers and employees) is: Are non-compete agreements enforceable in Texas? The answer is: Yes, they can be. Texas law...
Continue ReadingBelow you’ll find answers to the 15 questions I get more than any other about Texas noncompete law. Each answer is short and to the point. For almost every question I have also provided a link to a related post that addresses the question in greater detail and with more nuance. What is required for a covenant not to...
Continue ReadingNoncompete agreements remain enforceable in Texas and beyond after a federal judge in Texas issued a nationwide injunction against the Federal Trade Commission’s (FTC) recent ban on them. This landmark ruling temporarily preserves the status quo, allowing Texas employers to continue using them under existing state laws. Immediate Implications for Texas Employers and Employees For employers, this means that...
Continue ReadingOn July 3, 2024, a federal district court in Dallas ruled that the Federal Trade Commission (“FTC”) likely exceeded its authority when it enacted a nationwide noncompete ban. The court noted, “The text, structure, and history of the FTC Act reveal that the FTC lacks substantive rulemaking authority with respect to unfair methods of competition.” The court also found “there is a substantial likelihood the [FTC’s] Rule is arbitrary and capricious because it is unreasonably overbroad...
Continue Reading“Hooray, my noncompete is no longer in effect. The FTC just voided it.” Not so fast. Everybody knows about the FTC’s 3-2 decision to ban noncompete agreements. There are thousands of news stories on the internet about it, and no need to regurgitate them. I would like to caution everyone who’s bound by a noncompete agreement not to be...
Continue Reading“I can ignore my noncompete because Biden banned them, right?” I can’t tell you how many times I’ve heard this over the past few weeks. No, neither the Biden Administration nor the Federal Trade Commission has banned noncompetes. Even if the FTC were to attempt to do so, the new rule would almost certainly be immediately challenged in court. Chances are, such...
Continue ReadingIf you run a small business you look to control expenses wherever you can. And if you are going to ask your employees to sign a non-compete agreement, you are probably tempted to use a templated noncompete agreement rather than paying an attorney to draft one for you. Here are our two cents: It’s going to be much more...
Continue ReadingThis is a topic that occasionally comes up with respect to geographic limits on Texas noncompetes. If the noncompete provision contains a 10-mile geographic scope, does that mean ten miles measured in driving distance or ten miles through the air? Sometimes, this is an important distinction, because a particular point might be ten miles away through the air, but...
Continue ReadingMy employment was terminated. That means my non-compete agreement goes away, right? I am often contacted by folks whose employment has been terminated. They reasonably assume that their non-compete agreement is no longer enforceable. In reality, that’s not always the case. There is no rule in Texas stating that if an employee is terminated, rather than quits, a noncompete...
Continue ReadingDoes 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 enforce the noncompete nor...
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