“Hooray, my noncompete is no longer in effect.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 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...
Continue ReadingDoes your company need to have its employees sign noncompete agreements? If your company fits into any of these categories, the answer is almost certainly “Yes.” I have clients that I need to protect. Some of these clients have been with me for years, and we have, through hard work over a period of time, developed good relationships with...
Continue ReadingMany 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 time an employer discovers...
Continue ReadingUnder 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 attorneys’ fees. Actions for...
Continue ReadingIn 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 be assumed into a...
Continue ReadingA 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 coordinate the hiring of...
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