As an employer, you value your employees. However, you also value your company’s trade secrets and business operations. Competition in Houston can be fierce, and you do not want your competitors to benefit from your business activities. For this reason, you may require your workers to sign a non-compete agreement.
What can be included in a non-compete agreement?
A non-compete agreement is a contract in which a worker who is leaving your employment agrees not to work for the competition for a certain time period, agrees not to work within in a specific geographic location and agrees not to work within a certain scope of job duties.
A non-compete agreement usually also contains a clause stating the worker cannot give away company secrets or proprietary information with while employed with you or after leaving your employment.
Non-compete agreements protect employers in a variety of ways. As an employer, your company information and client lists are critical to the running of the business. You do not want your competitors to benefit from your business operations.
Also, training employees is costly and time-consuming. You also do not want your employees to be trained by you only to leave your employment and work for a competitor.
Limits to non-compete agreements
Texas law permits non-compete agreements, but with some limitations. First, the non-compete agreement must be a portion of an otherwise enforceable contract.
Second, the time that must pass before the worker can work for a competitor must be reasonable, as must the geographic area and scope of work duties.
If a worker is challenging the non-compete agreement in court, you must be able to show that your business would suffer damages if the non-compete agreement was not enforced. You must also be able to show that the non-compete agreement does not place an unreasonable burden on the worker’s ability to make a living.
Draft a solid non-compete
The state of Texas maintains that it is important to promote competition in an open marketplace. Therefore, courts place limits on non-compete agreements. If you want your employee to sign a non-compete agreement it is important that the contract is legally sound so that it can be enforced if necessary. And, if your former employee is trying to get out of a non-compete agreement through legal action, a strong defense can be key to your case.