Search Site
Menu
Part One: Who, What, When, Where & Why of Non-Compete Agreements

Non-competition agreements and their enforceability are the subject of many blogs and legal articles floating the web.  I typically stray from over-blogged topics such as this, however, each time I am confronted with an issue involving a covenant not to compete, I find that the information on the web tends to be overly general and fails to address real-world practical issues surrounding these types of agreements.  In that vein, I have decided to draft a four-part blog series to address practical issues I have run into involving non-competition agreements.  Each part of the series is derived my experience drafting, reviewing, and litigating non-compete agreements.  I am approaching this as an issue-specific blog, meaning that I assume you know that non-competition agreements are governed by Section 15.50(a) of the Texas Business & Commerce Code which provides that “a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.”  Further, Texas Courts require two factors be met in order to enforce a non-compete agreement, which are: (1) there must be consideration, and (2) the agreement must contain reasonable limitations on time, geographical area and scope of activity to be restrained.  With that foundation in mind, Part One of this series will address the “Who, Want, When, Where, and Why” of non-compete agreements.

  • WHO: An Employer or Contractor who wishes to restrain an employee and/or independent contractor’s post-employment activities (yes, an independent contractor can be bound by a valid non-compete agreement).

 

  • WHAT: A restrictive covenant that operates to restrain an employee or independent contractor from engaging in certain post-employment activities that compete with an employer’s business.
  • WHEN: Typically negotiated in pre-employment phase and later incorporated into an employment agreement, but can be presented to an individual at any time during the employment and/or contractual relationship.
  • WHERE: All industries and professions can technically require a non-competition agreement to be signed, however, the key factor to consider is whether the scope of activity to be restrained is reasonable and does not impose a greater restraint than necessary to protect the business interest of the party seeking to restrain post-employment activity.
  • WHY: The general purpose of a non-compete agreement is to restrict the ability of employees/independent contractors from engaging in competition with against the employer/contractor after termination of the employment relationship.

Stay tuned for Part Two where I will address drafting considerations for a non-compete agreement that complies with Texas law.

Kyla Wilder

Phone: 281-367-1222

Fax: 281-210-1361

[email protected]

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact a Dedicated Texas Business Lawyer To Schedule a Consultation
Call 281-367-1222 or contact us online to schedule a meeting.

Strong In Action

  • Spring 2019

    The Strong Firm represents borrower in $42.3 million HUD construction loan for multifamily real estate development in Walton County, Florida.

    Read More
  • Spring 2019

    The Strong Firm acts as legal counsel for borrower in $32.1 million HUD construction loan for multifamily real estate development in Conroe, Texas.

    Read More
  • Spring 2019

    The Strong Firm aids borrower in $31.7 million HUD construction loan for multifamily real estate development in Nueces County, Texas.

    Read More
  • Spring 2019

    The Strong Firm represents borrower in the refinancing of a $3.57 million commercial mortgage-backed security for a commercial office facility in Montgomery County, Texas.

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  • Peer Rated 2019 Award

Recent Blog Posts

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Bankruptcy Provisions Therein

Last Friday, Congress passed and President Trump executed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” of “Stimulus Bill”) granting a significant and admirable level of support to the U.S. economy that has been left reeling by the one-two punch of the COVID-19 pandemic and OPEC’s… posturing.  While
Read More
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Bankruptcy Provisions Therein

Combating Consumer Scams Amid COVID-19

As Texans, we have weathered our share of crises and disaster, although, here in southeast Texas, it’s usually in the form of a hurricane. Times of crisis and uncertainty, such as the current COVID-19 outbreak, tend to bring out not only the very best in people, but also the very
Read More
Combating Consumer Scams Amid COVID-19

Considerations for Commercial Property Owners and COVID-19

The novel coronavirus (COVID-19) has wreaked havoc on the world and our nation, casting widespread uncertainty and hardship in seemingly every corner of the economy. With many commercial tenants in dire financial straits – particularly those who rely upon customer interaction (i.e. retail, restaurant, and entertainment) – commercial landlords are
Read More
Considerations for Commercial Property Owners and COVID-19

Small Business Owner’s Guide to the CARES Act

The U.S. Senate Committee on Small Business & Entrepreneurship has put together the below summary of programs and assistance available to small business owners and certain nonprofit organizations through the Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).  The following information is current
Read More
Small Business Owner’s Guide to the CARES Act
  • Video Vault


    Watch videos done by our legal team to gain a better understanding of your legal needs. Our lawyers give video insight into areas such as Real Estate, Business Law, Mergers & Acquisitions and much more.

Pay Retainer Online

Use our easy-to-use and secure online payment feature.
We accept all major credit cards.

Pay Your Retainer

Contact us

Quick Contact Form