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Texas Law On Non-Compete Agreements

13 April 2021 No Comment

While Texas wants to encourage business and promote healthy competition in businesses, it also allows employers to require their employees to sign competition bans that protect their business interests. Similarly, at Merritt Hawkins – Assocs., LLC v. Gresham, 79 F.Supp.3d 625, 641 (N.D. Tex. 2015), the court found that a non-competition clause for permanent and temporary medical personnel was not an exclusion throughout the sector, in which the worker does not prohibit working in “other sectors of the personnel or medical industry.” However, non-competition bans become controversial if they prevent low-income people from finding jobs. As the New York Times reports, one-fifth of employees signed a non-compete clause, many of whom unknowingly. These clauses, critics say, prevent workers from seeking better jobs and end up creating monopolies in local markets. In Republic Services, Inc. v. Rodriguez, No. 14-12-01054-CV, 2014 WL 2936172 (Tex. App.-Houston [14th Dist.] 2014, no pet.) (mem. op.) The Tribunal found that Stroman had no evidence that the scope of the non-competition ban was “an industry-wide prohibition”.

Id. at 8. According to the Tribunal, the worker provided no evidence of the industry in issue and the employer provided evidence that there are legal services companies or legal advice that are not competitors to the employer. “In this report, we cannot legally find that the federal government has imposed an inappropriate sector-wide exclusion.” But things are changing. The Texas courts have begun to see a non-compete agreement in a more favourable light. This has strengthened the applicability of non-competition agreements. But there are still some obstacles. To be applicable, the agreement must be supported by a valid consideration and restrictions on workers must be proportionate with respect to the limitation of activities, the duration of the agreement and its geographical scope.

Hero: A confidentiality agreement prohibiting workers from using the general knowledge, skills and experience gained in previous jobs is similar to a non-compete clause and must meet Texas Covenant requirements not to act against competition law. In terms of geographic scope, non-competition prohibitions are more likely to be applied in court if they do not limit a worker beyond the areas in which he or she has actually worked for the employer attempting to enforce the agreement. Restrictions that go beyond these geographic areas are generally considered inappropriate. In order to increase the likelihood of a non-competition agreement being implemented, companies should consider the following: each state has slightly different non-competition laws, with some states limiting their degree of application to varying degrees. In California, for example, non-competition prohibitions are invalid, while Texas recognizes its validity in certain circumstances. The consequence of the concierge reappeared in Weber Aircraft, L.C. v. Krishnamurthy, No. 4:12-CV-666, 2014 WL 12521297 (E.D.

Tex. January 27, 2014). In this case, the non-competition clause prohibited workers from working for a company offering the same products (seat products and components) as the employer, or from working in any capacity for five specific competitors.

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Kathy Becker (291 Posts)

Kathy is the CEO/President of the Company of Experts, Inc. and oversees this Small Woman Owned Business serving schools, colleges and universities, businesses, corporations and non-profits moving them from deficit models of planning and thinking to engagement, empowerment and collaboration.

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