Last week, a federal court in Texas refused to enforce a company’s non-compete agreement against four key employees who started a competing business because the agreement was missing a key term – the end date. The above situation can be avoided through simple practice of: (1) knowing what is in the company non-compete agreements; (2) making sure all the key provisions required by the relevant statutes are included; and (3) periodically updating non-compete agreements so that they are compliant with the relevant state law.
A good non-solicitation and confidentiality agreement, combined with other key provisions, and smart business practices, can deter client poaching and preserve the relationship between the salon and its clients even in the face of its employees’ departure.
The Texas Citizens Participation Act (TCPA), enacted by the legislature in 2011, has been wrecking havoc in business and employment disputes due to the statute’s overbroad language, confusing and conflicting interpretation by the various courts of appeals and federal courts, and defendants’ persistence in invoking the statute’s dismissal process in trade secrets and non-compete lawsuits.
In Part I, I described requirements for non-compete agreements in Texas. In Part II, I describe the common mistakes that employers make when it comes to non-compete agreements.
What distinguishes those companies that are successful in enforcing their non-compete agreements from those that are not? Generally speaking, just three factors: good agreements, evidence of violations, and swift action to enforce.
How enforceable is a non-compete? Generally speaking, non-compete agreements are enforceable. Is a non-compete valid if you are fired? Usually, yes. Do non-compete agreements hold up? When written correctly, yes. How long does a non-compete agreement last? As a general rule, non-compete agreements that last two years or less are considered reasonable.