Non-compete agreements are a popular way for businesses and companies of all types and sizes to protect their intellectual property and trade secrets. Employers can ask new employees to sign contracts that would only take effect after the employee-employer relationship ends. While there are a variety of reasons why non-compete agreements can be beneficial, they should be carefully worded and drafted with the help of an experienced attorney.
In some cases, a non-compete contract can become the center of a legal battle between a person and his or her former employee. The court may closely scrutinize these contracts, and, as an employer, you would benefit greatly from experienced guidance when developing this type of contract.
How you can protect your business interests in a non-compete agreement
Non-compete agreements are enforceable under Texas law as long as they meet certain requirements. They must clearly demonstrate that a business interest, such as a trade secret, is truly at risk, threating a business's bottom line, but they must also not place an unfair burden on the former employee or restrict his or her ability to earn a living.
Terminology and enforceability are complex issues, but a non-compete agreement must meet the following requirements in order to stand up to the scrutiny of the court:
- Must clearly prove that the company's financial and competitive interests are at stake
- Must be supported by evidence and thoughtful consideration of genuine business interests
- Must be reasonable in the terms regarding the scope and time frame that it can affect an employee
Essentially, a non-compete agreement should provide value and benefit to both parties. While a business has the right to protect competitive advantage through intellectual property or trade secrets, it must not infringe upon the rights of the employees.
What happens when a former employee violates a non-compete agreement?
Unfortunately, non-compete agreements do not make a company immune to complications regarding competition and employee rights. If you suspect that a former employee is guilty of violating the terms of an agreement by providing client lists, private information and other company secrets, it is most important to secure legal assistance as soon as possible.
With the help of a business litigation attorney, you can protect your business interests and keep private information in the right hands. A properly worded agreement should stand up in court, so if you have concerns regarding the protection of certain property, appropriate help is needed from the very beginning of the employee-employer relationship.