Unlike many other states around the country, Texas did not see any drastic changes in its non-competition laws in 2018. However, out of a 100 + cases involving non-competition disputes, the following handful stand out either because they addressed a novel issue or clarified an area of confusion in this gray area of the law.
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.
While a non-solicitation clause that prohibits a sales employee from soliciting all company customers may sometimes be justified, most of the time it is much more reasonable to limit the non-solicitation restraint only to the customers and prospective customers with whom the sales employee directly interacted rather than every customer in the company’s database.
Employees owe a duty of loyalty to their employer and may not: (1) appropriate company trade secrets; (2) solicit away the employer’s customers while working for the employer; (3) solicit the departure of other employees while still working for the employer; (4) carry away confidential information.
Texas courts have issued several interesting opinions in 2017 regarding Texas non-compete law, explaining and defining when the Texas Covenants not to Compete Act applies and clarifying procedural mechanisms and remedies in non-compete disputes.
In Texas, covenants limiting employees’ professional mobility are unlawful restraints on trade unless they fall within the exception created by the Covenants not to Compete Act.