It’s not always clear whether or not a non-compete agreement is enforceable. This world of restrictions and agreements is often daunting for even the savviest of business owners, to say the least. If you’re struggling to make heads or tails of these types of clauses in Texas, here’s some simple information that will point you in the right direction.
Let’s start with what a non-compete agreement is. This is a form of a restrictive covenant that puts limits on the places a worker can seek employment after they’ve left their current company. The agreement also defines what actions a business owner is allowed to take after they have sold their company.
Restrictive covenants come in four different varieties, distinguishable by what they prohibit. The type of agreement you’re dealing with has a significant bearing on how enforceable it is. These agreement types are:
- Non-compete agreements
- Non-solicitation agreements
- Non-poaching agreements
- Non-disclosure agreements
When the reasonableness of the agreement is called into question
Non-compete agreements are there to prohibit individuals from owning or being employed at a competing company. But in many cases, courts are looking at these agreements with a highly critical eye.
If there are any doubts about the reasonableness of the agreement, it may be a clause that’s impossible to enforce. However, it’s important to bear in mind that so long as there is a genuine cause for the restriction from a business perspective, these agreements are generally quite enforceable.
The types of non-compete agreements that end up being “non-enforceable” are those that are deemed to be unreasonable in a court of law. When the burden and hardships put onto the former employee go too far, it might not be possible to enforce the clause. This also may be the case if the prohibitions in the clause would be damaging to the public interest.