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.”
In Texas, employees have the right to resign from employment and go into business in competition with their employers (absent a non-compete agreement). There is