Non-Compete Agreements in Allen, Texas

Defining Non-Compete Clauses and Agreements

When you hire an employee or develop a business relationship with another party, there is always the risk they will use their knowledge of your business to begin a competing business or work for a competitor once the relationship comes to an end. Fortunately, non-compete agreements and clauses can protect you and prevent this from happening.

What is a Non-Compete Agreement in Texas?

A non-compete agreement or non-compete clause in a contract prohibits a person or business entity from providing services or engaging in business – in specific markets and locations, and for a certain time period – in a manner that would compete with your business. The purpose of non-competes is to protect your company from losing employees to direct competitors who will leverage inside knowledge or contracts.

To protect a company's confidential information, a Texas employer can utilize a non compete agreement. A non compete agreement is enforceable in Texas if it is supported by valid consideration, and is reasonable in time, geographic scope, and activities to be restrained.

Do Non-Competes Hold Up In Texas?

According to Texas noncompete law, agreements may hold up. Non-compete agreements in Texas may be enforceable if the following conditions are true:

• They are part of an enforceable agreement
• They are supported by valid consideration (ie. something of value is given to the employee)
• The limitations must be reasonable in regard to time, geographical area, and activities that will be restrained
• Employer must demonstrate how non-enforcement of the agreement would harm the business and that enforcing it would not place an unfair burden on someone’s profession or trade, or ability to support themselves
• They may include an executory promise (a promise the employer plans to carry out in the future) made in relation to an at-will employment agreement as long as the employer fulfills the promise when the non-compete agreement was received (for example, a promise to provide specific training or access to proprietary information -- anything that increases interest in the business and is protected by the non compete agreement in Texas

Have questions about non-compete agreements in Texas? Contact Law Offices of Dan Chern, P.C. online or call (972) 200-3078.
 

General Provisions in Non-Compete Agreements

Most non-competes contain the following general provisions:

• Reason for the non-compete. There must be a specified, reasonable motivation for the non-compete clause or agreement.
• Effective date. The effective period and terms need to be specified in order for a non-compete to be enforceable. The time period of the restriction from working for a competitor or as a competitor needs to be reasonable for your business industry.
• Non-solicitation. While non-solicitation clauses are not always in non-competes, it is best to have one to protect your clients or employees from being poached by your competitors.
• Geographic area. A non-compete can only be enforced within a certain geographic area.
• Compensation. There needs to be some form of compensation, such as benefits of employment, for not competing.
• Penalties. There are certain penalties for breach of a non-compete agreement, including being susceptible to a lawsuit.

Let The Law Offices of Dan Chern, P.C. Help You Today

If you have any questions about what’s right for your company, or if you need legal representation to enforce your non-compete clause or agreement, look no further than the Law Offices of Dan Chern, P.C. With over 25+ years of experience, our Allen business litigation lawyer has a thorough understanding of Texas business law to determine the best course of legal action.

Contact us or call (972) 200-3078 and schedule a case evaluation with a non-compete agreement lawyer in Allen.