In today’s competitive job market, many employers require employees to sign non-compete agreements to protect their business interests. These agreements restrict employees from working for competitors or starting a similar business within a specific timeframe and geographic area after leaving a company. While employers see them as a safeguard, employees often view them as restrictive and unfair. In Texas, non-compete agreements are enforceable under certain conditions, but courts scrutinize them carefully to ensure they are reasonable as our Arlington, TX business dispute lawyer who has been rated in the top 100 of National Trial Lawyers can share.
What Makes A Non-Compete Agreement Enforceable In Texas?
Under the Texas Business and Commerce Code § 15.50, non-compete agreements are legal but must meet specific requirements to be enforceable. Texas courts generally uphold them if they:
1. Are Ancillary To An Otherwise Enforceable Agreement – A non-compete must be tied to a valid employment contract or agreement, such as receiving specialized training or access to confidential information.
2. Have Reasonable Limitations – The agreement must be limited in scope, geography, and duration. Courts will not enforce overly broad restrictions that unreasonably prevent someone from making a living.
3. Protect A Legitimate Business Interest – The employer must show that the restriction is necessary to protect trade secrets, confidential information, or goodwill.
If a court finds a non-compete agreement too broad, it has the power to modify the terms to make them reasonable instead of voiding them entirely. It is important to work with a lawyer to know how to break a non-compete agreement.
Recent Legal Challenges To Non-Compete Agreements
Non-compete agreements have faced increasing legal challenges, with courts favoring employees’ rights to work freely. Some common issues include:
• Unreasonable Restrictions – Employers sometimes draft overly broad agreements that prevent former employees from working in entire industries rather than just specific competitors.
• Low-Wage Workers – Texas courts are less likely to enforce non-competes against low-wage workers who do not have access to sensitive company information.
• Public Policy Concerns – There is growing debate over whether non-competes stifle innovation and limit job mobility. This has led to increased scrutiny at both state and federal levels.
Alternatives To Non-Compete Agreements
Because non-compete agreements are often challenged in court, many Texas businesses use alternative legal tools to protect their interests, such as:
• Non-Solicitation Agreements – Prevent former employees from poaching clients or employees.
• Confidentiality Agreements (NDAs) – Restrict the disclosure of sensitive company information.
• Garden Leave Clauses – Require employees to remain on payroll but not actively work for a competitor for a set period.
How We Can Help
If you are an employee facing a non-compete agreement or an employer looking to draft an enforceable one, Brandy Austin Law Firm can help. Or, if you are looking to start a business, this is an important topic to bring up with a lawyer. Our experienced attorneys understand Texas employment laws and can ensure your agreement is legally sound while protecting your rights and interests.
To schedule a consultation, contact our lawyers who have been rated as some of the top attorneys by Fort Worth Magazine today and let us help you navigate the complexities of non-compete agreements in Texas.
