Employment Agreement With Non Compete Clause In Bexar
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FAQ
Under Texas law, a covenant not to compete is only enforceable if it is ancillary to or part of an otherwise enforceable agreement and it contains reasonable limitations regarding time, geographical area, and scope of activity.
You are bound by whatever conditions you agreed to in the non compete contract. You can leave the job and likely still practice in your given field. The most common restriction is one of distance. So you cannot leave your current company and go across the street to work for a competitor.
To be enforceable, non-compete agreements in Texas must be reasonable and specific with regards to geographic area, the scope of activities, and the duration (i.e. how long the restriction lasts). A typical duration for non-competes in Texas is somewhere between six months and two years.
In Texas, a court has the ability to modify – or even nullify – the non-compete if the court determines that it is not reasonable. The courts are given wide latitude to reform a non-compete if the court believes the scope of activity, duration, or geographic area are too restrictive.
On August 20, 2024, a Texas federal court ruled that the FTC's final rule banning most non-compete agreements (the “Non-Compete Rule”) cannot go into effect as scheduled.
Federal judge tosses U.S. ban on noncompetes A federal judge in Texas has struck down the government's ban on noncompetes. An estimated 30 million U.S. workers are subject to the employment agreements.
Texas is a "blue pencil" state. That means that an overbroad non-compete (for example: one that lasts for 10 years, or that has no geographic restrictions) is still enforced.
Under Texas law noncompete agreements can be enforceable if: The noncompete provision is part of an otherwise enforceable agreement. The non-compete requirement is supported by valid consideration (consideration meaning something of value provided to the employee).
Does a non-compete hold up if you are laid off in Texas? In Texas, the enforceability of a non-compete does not change if you are laid off. Its validity depends on factors like consideration given, such as sharing of trade secrets, not just employment.
