In Texas, courts can rewrite non-compete agreements to make them more reasonable. This process is called “reformation.” There are certain statutory limitations on when, how,
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
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.
In Texas, “the hallmark of enforcement [of non-compete agreement] is whether or not the covenant is reasonable.”
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.
The unclean hands defense “allows a court to decline to grant equitable relief, such as an injunction, to a party whose conduct in connection with the same matter or transaction has been unconscientious, unjust, or marked by a want of good faith, or one who has violated the principles of equity and righteous dealing.”