What are the laws concerning non-compete agreements?

Non-compete agreements are legal contracts between an employer and an employee that restrict an employee from working for a different employer or starting their own business within a certain period of time after they have left their job. In Texas, non-compete agreements are governed by non-compete statutes and common law. Generally, Texas courts enforce these agreements if they are “reasonable” in terms of time frame, geographic scope, and the nature of the protected interests. The penalty for breaking a non-compete agreement is usually an injunction which an employer may seek from a court to stop the employee from working for the competing company or engaging in their business. The employer may also sue the employee for damages or lost profits or both. Texas also imposes certain restrictions on non-compete agreements. Most such agreements must be in writing, and the employer must have a legitimate business interest that the agreement seeks to protect. The non-compete agreement cannot be overly broad or too restrictive and must have reasonable limitations on time and geographical scope. Employers must also provide a reasonable amount of compensation to employees for agreeing to the agreement. Finally, employees cannot be prevented from exercising their legal rights or collecting unemployment benefits.

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What are the laws concerning non-compete agreements?

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