Texas Confidentiality Agreement with Employee Regarding Research, Development, Production, Marketing, and Management; and Covenant not to Compete
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FAQ
Under Texas law, a non-disclosure agreement is enforceable even if it is coupled with an unenforceable non compete agreement or invalid non-solicitation provision.
There are three main agreements or restrictive covenants regularly used by business owners to limit disclosure or competition. They include confidentiality, non-solicitation and non-compete agreements or provisions.
The well-known general rule is that a covenant not to compete is only enforceable if its terms are reasonable and necessary to protect the legitimate business interests of the employer.
A confidentiality agreement is a legal document that binds one or more parties to keep secret or proprietary information confidential or proprietary. An NDA is a kind of a contract that upholds secrecy; it does so by defining a confidential partnership and legally binding any parties who sign the NDA to that
Confidentiality agreements can either protect both parties and so both parties are agreeing not to disclose or use each other's confidential information. In contrast, non-compete agreements are almost always one-sided agreements. Usually, one party (the employer) requires the other party not to compete.
A covenant not to compete has three elements: (1) a limitation on the work that may be pursued by the employee, (2) a definite time, and (3) a definite geographical area. The time and geographical restrictions are usually straightforward; the limitation on work is a little more complex.
A covenant not to compete will be deemed valid if it only restricts the employee's opportunity to compete while they remain employed with the employer requiring the covenant, but imposes no restrictions on the employee once they separate from the employment.
Texas law provides that a covenant not to compete is enforceable only if it: is ancillary to or part of an otherwise enforceable agreement. contains reasonable limitations as to time, geographical area, and scope of activity.
Generally, confidentiality agreements are enforceable when they meet the general requirements of a contract.
The answer is: A non-compete agreement IS enforceable in Texas if it is supported by valid consideration, and is reasonable in time, geographic scope, and activities to be restrained. A Texas employer can utilize a non compete agreement to protect company goodwill and confidential information.
