The Nuances of Non-Compete Agreements in Texas

In today's competitive business landscape, protecting your company's confidential information and trade secrets is critical. Non-compete agreements can be a valuable tool in achieving this goal by restricting former employees from working for competitors in a specific geographic area for a set period. However, Texas law regarding non-compete agreements has some important nuances that employers must understand.

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Enforceability:

Under the Texas Covenants Not to Compete Act, a non-compete agreement is only enforceable if it meets the following criteria:

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• Ancillary to a Valid Agreement: The non-compete must be part of an otherwise enforceable agreement, such as an employment contract or severance agreement.
• Reasonable Limitations: The restrictions on time, geographic scope, and activity must be reasonable to protect the legitimate business interests of the employer.Time: Generally, courts in Texas uphold non-compete agreements for up to one or two years.Geography: The restricted geographic area should be limited to the area where the employee's work activities took place or where the employer has a legitimate business interest.Activity: The restrictions should be narrowly tailored to protect the specific confidential information or trade secrets the employee was exposed to.

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What Can Be Protected?

Non-compete agreements in Texas can be used to protect a variety of legitimate business interests, including:

• Trade secrets: Confidential information that gives a company a competitive advantage.
• Customer relationships: Established relationships with clients or customers.
• Confidential information: Proprietary data, marketing plans, or customer lists.

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Employee Considerations:

Employees in Texas have the right to pursue new employment opportunities after leaving a job. Here are some important things for employees to consider:

• Review Carefully: Before signing a non-compete agreement, employees should carefully review the terms and understand their potential limitations.
• Seek Legal Counsel: If you have any questions or concerns about the enforceability of a non-compete agreement, consult with an attorney.

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Non-compete agreements can be a valuable tool for Texas businesses, but they must be drafted and enforced in accordance with state law. At Patel Gaines our experienced team can help you determine whether a non-compete agreement is right for your business and ensure its enforceable. We can also advise employees on their rights and obligations under these agreements.

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Contact Patel Gaines Attorneys at Law today to schedule a consultation and discuss your specific needs.

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