A non-compete agreement is intended to prevent an employee from working for a competitor or starting a similar business for a certain period or within a specific geographical area after leaving a company. They are common in industries where intellectual property, trade secrets or client relationships are important.
For a non-compete agreement to be valid and enforceable in Texas, it must be reasonable in its scope and duration and not too broad or restrictive. If a non-compete agreement prevents you from working in a large region for too long, it may not hold up in court. It must also be tied to a legitimate business interest, such as customer relationships or intellectual property.
The potential legal consequences
The consequences of violating a non-compete agreement can be serious. For example, your former employer can go to court and seek an injunction to stop you from working for a competitor. Should the court grant it, you may be prohibited from working in your field for a significant time.
The law also allows employers to recover actual damages, which can include lost profits, loss of clients and legal fees. Your former employer could file a lawsuit to claim such damages if your actions caused significant harm to their business, and the financial penalties could be steep.
What if you’re accused of a non-compete violation?
If you’re facing legal action for violating a non-compete agreement, there are defenses you can raise. You can, for instance, argue that the agreement is overly broad or vague and therefore unenforceable under Texas law. Similarly, you can demonstrate that it doesn’t protect legitimate business interests.
Reaching out for legal guidance if you’re considering a job change or new business venture but are bound by a non-compete agreement can help you make informed decisions and understand your rights and options.