Texas companies that are looking to keep former employees from encroaching on their business will often ask employees to sign a non-compete agreement. This is a complicated area of the law that could result in disputes. For both employer and employee, it is vital to understand exactly what this instrument does and whether it is binding.

Companies will want to keep former employers and consultants from competing with them once their time with the company ends. The business may not want to see someone using what they have learned in their job to take their business. Sometimes, as a condition of employment, they will require a non-compete agreement. One of the keys to the validity of the non-compete is that it is not too restrictive and still allows the former employee to earn a living. They must not be too draconian and should be limited in scope.

These documents are often challenged in court. Companies take these agreements seriously, viewing them as more than a piece of paper. At the same time, former employees do not want any restrictions on their ability to pursue their business goals. While some states will completely disregard non-compete agreements and view them as void, most states will at least give some effect to their provisions. The key rule is that unreasonable generally means unenforceable.

Employees who are being asked to sign a non-compete agreement, or have entered into one and want to know whether it is enforceable, may seek legal counsel. There may be a way to argue that the agreement is unenforceable. Alternatively, the agreement might not be as restrictive as it initially seems. Legal counsel is recommended because there could be consequences for violating the agreement.