Non-Compete and Non-Solicitation Agreements

A common scenario on an employee’s first day at work in a new job is to receive a large stack of paperwork to sign. Buried in the papers is often a non-compete agreement or a non-solicitation agreement. What to do?

Far too often, people assume a noncompete agreement is not enforceable in Texas because this is a right to work state. But that assumption is based on a misunderstanding of what right to work means. That Texas is a right to work state means only an employee cannot be required to join a union as a condition of accepting a job in Texas. It has nothing to do with the enforceability of a non-compete agreement.

Texas law allows people to enter into enforceable non-compete and non-solicitation agreements. Non-compete and non-solicitation agreements are routinely enforced in Texas if the agreements comply with governing statutes.

When faced with signing a non-compete or a non-solicitation agreement, an employee should understand the difference between them.

A non-compete agreement prohibits an employee from working in a defined industry or job for a particular period of time in a defined location. In contrast, a non-solicitation agreement only prohibits an employee from soliciting clients or employees of the former employer for a defined period and, sometimes, in a defined geographic area. The differences between the agreements are important.

Before signing a non-compete or non-solicitation agreement, the employee should figure out the scope of the agreement.  If the employment ends, can the employee still make a living in the same profession without having to move?   This often turns on the specific language of the restrictions in the agreement.

Employees should not hesitate to have a non-compete or non-solicitation agreement reviewed by an attorney before signing it. While this may cost a little bit in legal fees, it can prevent a much more expensive fight after the employment relationship ends.

If you have questions about a non-compete or non-solicitation agreement, contact the attorneys at Johnston Tobey Baruch for an evaluation of your claims by clicking the Tell Us About Your Case button and selecting the Employment Law option.

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