Non-compete agreements have an important place in business. They protect valid business interests.
But it the non-compete agreement is not constructed correctly, it can be negated. Texas law decrees that a non-compete can’t demand greater restriction than is necessary to protect the business.
Interests and restrictions
Protectable business interests include:
- Trade secrets
- Confidential information
- Specialized training
- Relationships with current or former customers
- Referral sources
Restrictions on a non-compete agreement include limits on the job duties. They cannot be overbroad – a computer programmer cannot be prohibited from working as a landscaper at another company
Restricts also cannot be overbroad regarding geography. Many non-competes will forbid the employee from working in the state. However, if the business doesn’t have customers in an area of the state, then the non-compete can’t be enforced. For example, if an employee works in Houston and the company only does business in the Houston and Dallas metropolitan areas, then a non-compete that covers the entire state is invalid if the employee wants to work in Amarillo.
The non-compete must also be of a proper time duration. The period stated can only be of a length necessary to protect the business’s information or interests. Periods of two years are usually found to be reasonable.
If you are an employee or a company that has a non-compete in an agreement and you have questions, contact a qualified, experienced attorney for a proper consultation.