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
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
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.
and schedule a free case evaluation today.