Non-Compete Agreements in 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.

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.

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 Our Dallas Business Law Attorney 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 nearly 20 years of experience, our Dallas business lawyer has a thorough understanding of Texas business law to determine the best course of legal action.

Contact us and schedule a free case evaluation today.

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