Independent Contractor Agreement With Non Compete Clause In Houston
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If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
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FAQ
They are enforceable under the Texas Business & Commerce Code and upheld by the Supreme Court of Texas. An enforceable non-compete agreement must have reasonable limits in time, place and scope.
Every state has its own law regarding the use of non-competes. For example, in California, they are deemed illegal, except when selling a business or a shareholder's stock or dissolution of a partnership; while in Florida, they are allowed but are subject to strict scrutiny.
Texas will enforce a non-compete agreement if it meets certain criteria: It must be included with another agreement (such as an employment offer), and be in exchange for “consideration” (i.e. something in return, such as specialized training or confidential information).
Add information about the parties involved. Describe the terms of the Non-Compete Agreement, such as the length and area of the restriction. If necessary, you can include a non-solicitation clause. Add a confidentiality clause.
Non-compete clauses will likely be unenforceable if an employee is misclassified as an independent contractor. Typically, independent contractors are experts in their chosen field and can work for multiple companies. They do not have the same benefits as employees and manage their affairs independently.
The answer is: Yes, they can be. Texas law makes non-compete agreements enforceable if they are: Accompanied by or part of an otherwise enforceable agreement; Supported by valid consideration (ie.
As previously reported (Dentons Alert), the US Federal Trade Commission (“FTC”) issued a regulation earlier this year that effectively bans most non-competes for employees and independent contractors (the “FTC Rule”). The effective date of the FTC Rule is September 4, 2024.
In some cases, a technical defect (such as the employer not signing the agreement) can affect enforceability. Finally, the employer's conduct (e.g., unclean hands, or conduct inconsistent with enforcement) can sometimes provide the employee with a good way out of a noncompete.
