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.
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.
On February 7, 2020, the American Medical Association submitted a letter to the Federal Trade Commission (FTC) concerning non-compete agreements in the workplace and urged
“Hope for the best, but plan for the worst” should be every employer’s motto in handling the departure of employees. While most will leave without
In Texas, non-compete agreements that relate to the practice of medicine must meet certain statutory requirements in addition to the consideration and reasonableness conditions discussed here.
For a non-compete agreement to be enforceable, an employer must give an employee something of value in exchange for his or her promise not to