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When should you consider action for a non-compete violation?
Clarity is the most important detail in any contractual agreements. It is a legal essential, yet certain documents always have more terminology that is left open to interpretation. The non-compete waiver an employee signs when changing jobs is among those, with key elements that determine if it is enforceable if it is challenged in court. The agreement is a means of protection for the business but it cannot hinder the former employee's prospects.
Key terms
Texas courts enforce a non-compete by how reasonable the demands are.
Specifically this pertains to:
- Protection of business assets and information
- Scope of non-compete (meaning time period of the agreement and job duties before and after)
- Geography of non-compete
Uncertain terms
Legal questions arise when a business loses an employee because these terms themselves are variable. What is a reasonable time period or geography to include in a non-compete agreement? If your main competitor is 99 miles away, can you define the non-compete as effective within 100 miles, for example, if your region is typically defined as a 50-mile radius? If a salesperson of your software firm is leaving to work in sales for a vacuum company, is there enough crossover to justify action?
Protecting your Texas business assets with noncompete agreements
Thank you for visiting our new blog. In this first post, we will introduce the noncompete agreement and the important role it can play in the success of a Texas business of any size or type.
Texas business climate is thriving
The business environment in Texas has improved greatly since the recession and both home-grown entrepreneurs and recent transplants are hanging up shingles here. In 2016, Texas ranks third overall among top states for doing business considering such factors as access to generous financing, favorable regulatory structure, relatively low state tax burden, competitive labor market and affordable energy costs, according to this year's national analysis by Area Development.
Once you have decided to launch your business in the Lone Star State, finding an attorney to guide you through all the important decisions in startup and business formation is imperative. When your attention eventually turns to hiring the right help, you should thoroughly explore with your lawyer and understand the benefits of noncompetition agreements and how to draft them to be enforceable under Texas law.
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