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Employers frequently require high-level employees to agree not to compete with the employer should the employee leave the company. Such an agreement, referred to as a non-competition agreement or a covenant not to compete, typically restrains a person from engaging in a competing business with a former employer within a certain geographic area for a specified time period. These agreements must comply with the provisions outlined in the Texas Covenants Not to Compete Act and the holdings found in relevant case law.
While Texas courts have historically disfavored non-competition agreements because these agreements hinder a person’s ability to work, recent developments indicate that Texas courts are now more likely to enforce these agreements, provided the terms are reasonable.
An employee who is asked to sign a non-competition agreement should carefully consider whether the agreement’s terms are reasonable. An employee should also consider hiring an employment law lawyer to review the proposed agreement, provide insight into how the agreement could affect the employee in the future, and help negotiate additional terms.
An employer who seeks to enforce a non-competition agreement should draft the agreement’s terms carefully to avoid imposing conditions that a court might consider too restrictive. For this reason, an employer may wish to hire an experienced employment law attorney to draft such agreements.
If you would like to discuss a covenant not to compete with a Dallas employment lawyer, contact the employment lawyers at Clouse Dunn LLP at info@cdklawyers.com.
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