In Texas, client non-solicitation agreements are subject to the same rules as the non-compete agreements. Therefore, they must be “reasonable” and “not impose a greater restraint than is necessary to protect the goodwill or other business interest” of the employer.
Category: Non-Solicitation Agreements in Texas
Are Courts Actually Enforcing Non-Compete Agreements During the Pandemic?
While the enforcement of non-compete agreements around the country remains strong, the courts are looking closer at whether an employee will suffer “undue hardship” if his or her non-compete is enforced. Thus, employers should avoid taking unreasonable positions in court and be prepared to explain why enforcing a particular non-competition agreement will not prevent an employee from earning a living.
Texas Employer Ordered to Pay Healthcare Employee’s Attorney’s Fees in a Non-Compete Dispute
A recent decision from the Thirteenth Court of Appeals in Texas serves as a cautionary tale for Texas employers seeking to enforce their non-compete agreements. In this case, a company that provided surgical assistants to surgical facilities and physicians sued a former employee for breaching his 2-year non-compete covenant, which prohibited him from “in any way” offering his services to any “client institutions or client surgeons” of his former employer.
When Do Employers Enforce Non-Compete Agreements?
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.
COVID-19 Texas Employer Guide – Are Non-Compete Agreements Still Enforceable?
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.
American Medical Association Takes a Stance on Physician Non-Compete Agreements
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