Non-Competition and Trade Secrets Law
While getting out of non-compete restraints is not always possible, some of the most common ways that employees – and employers that want to hire them – can overcome such agreements include the following: (1) lack of consideration; (2) unreasonable restraints; (3) no legitimate business interest, and other defenses.
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.
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.
While Texas allows non-compete agreements that are reasonable and meet the requirements of the Texas Covenants Not to Compete Act, the courts in this state
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.
Enforcing non-compete agreements is as much of a business decision as it is a legal one. Having a non-compete agreement that is legally enforceable, allows you to decide whether it makes business sense to enforce it against a particular employee. Without a legally-enforceable non-compete agreement, however, the business reasons may not even matter.