An employer cannot wrongfully breach a provision of an employment contract that is favorable to the employee (such as reducing his wages without his consent and without contractual authority to do so) an then go into a court of equity to secure, by injunction, the enforcement of another provision favorable to it.”
Since the White House issued a call to action to state legislators asking them to reign in the use of non-compete agreements in 2016, 16 states proceeded to amend their non-compete statutes to add additional protections for employees
Both employers and employees are wondering how COVID-19 will affect the litigation of the non-compete disputes around the country and whether the courts will be more or less likely to enforce such agreements in light of the nationwide health emergency and the drastic economic downturn.
Many companies in Texas have non-competition agreements with their employees, but not all companies enforce them. Some companies will sue the departing employees for violating non-compete agreements, even thought such agreement may not be valid under Texas laws. Others, will not bother with enforcement even though they have valid agreements on hand. The reality is that the validity of a non-compete agreement is only one factor in a company’s decision whether to enforce it.
The Center for Disease Control and Prevention (CDC) just issued an Interim Guidance that pertains to “critical infrastructure workers,” who may have been exposed to COVID-19.
CDC advises that such workers may be permitted to continue work following potential exposure to COVID-19 as long as they remain asymptomatic and additional precautions are implemented to protect them and the community.
In Texas, the reason for termination of employment – whether it was for cause, without cause, a layoff, a reduction in force, or any other reason – does not affect the enforceability of a non-compete agreement. Therefore, employers should not assume that non-competition agreements are no longer enforceable and must carefully approach enforcement of such agreements against departing employees as well as the hiring of new employees who may be still bound by non-competition agreements with their former employers.