A Texas Court Refuses to Enforce a Non-Compete Agreement In a Case Involving Every Employer’s Worst Nightmare

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.   

Is a Non-Compete Agreement Without Geographical Restriction Enforceable in Texas?

Until there is a ruling from the Texas Supreme Court resolving the issue of whether noncompete agreements must contain an express geographical limitation, to be safe, companies should include such limitation in the agreements in additional to any limits on client solicitation. Stay tuned to learn how the Texas Supreme Court rules on this issue.

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