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What are the limits of non-compete agreements in Texas?

Writing employment contracts in the state of Texas is a delicate matter. What is written and agreed to in such a contract can have a huge impact on both the business and the employee. One common example are the non-compete agreements that are included as clauses in employment contracts in many different industries for everything from entertainment to hair-styling. These clauses can have long lasting effects even after an employee leaves the company.

The basics of non-compete agreements

A non-competition agreement, or non-compete agreement for short, is often included as a clause in a contract that prevents an employee from entering into competition with the employer if they were to leave the company. This clause or agreement should specify a specific length of time after the employment has ended that the former employee will be barred from working for a competitor.

Non-compete agreements in Texas

Noncompetition agreement contracts and disputes can lead to serious legal battles. In Texas, such an agreement will be upheld under certain circumstances. These include agreements that are:

  • within an otherwise legal and enforceable contract
  • supported by a consideration deemed to be valid
  • made in exchange for something valuable
  • reasonable in regards to the time frame and the work activity barred

Overall, these agreements shouldn’t be used as a means to stop employees from finding employment or continuing their careers after leaving a company. While non-compete clauses are legal in Texas, there are significant limits on what they can do and say. If you are an employee, it’s a good idea to read any agreements carefully to ensure that such an agreement is in your best interest when negotiating your contract.