Businesses often ask new employees to sign an agreement not to compete or go to work with a competitor should they leave the company. Non-compete clauses are in a class called restrictive covenants, and as such are strictly regulated in Texas. Indeed, in most cases non-compete clauses are not legal in this state, so if you are a party to one it is very important to consult with a Texas business lawyer.

How Non-Compete Clauses Are Initiated

Non-compete clauses are usually included in employment contracts. An employee is asked to sign an affirmation that for a specified period he will not accept employment with a competitor. The clause is usually limited further to a geographic area. The logic behind this, of course, is that unless it is a very large, multi-state or international corporation, an entity in another location which provides the same service is probably not going to be a competitor.

When Non-Compete Clauses Violate Texas Law

If you decide to include a non-compete clause in an employment contract in your business it is very important that you work with a Conroe business lawyer to make sure you are not unintentionally violating state law. Texas strictly limits how and in what situations these clauses can be implemented. This is because non-compete clauses are seen as constraints on free enterprise, and tend toward monopoly. As such, they generally go against the Texas Free Enterprise and Antitrust Act.

State Provisions for Non-Compete Clauses

Under certain circumstances such clauses can legally be initiated in Texas. The provision that describes how a non-compete can be implemented is the Texas Covenant Not to Compete Act, section 15.50(a) of the Texas Business and Commerce Code. The act states that a non-compete can be enforceable if it is a part of another contract or agreement that is valid. It must be limited in terms of time, geography, and scope. When a non-compete clause is initiated properly a violation can lead to injunctive relief and damages for the company.

For Legal Assistance

If you need assistance with developing a contract with a non-compete clause, or have another business law concern, a College Station business lawyer can help. Peterson Law Group will provide you with the highest quality representation. Call us today at 979-703-7014.