Looking Out For Your Career

Determining whether a noncompete agreement is enforceable

On Behalf of | Jan 14, 2021 | Noncompete Agreements

Texas employers often include noncompete agreements in their employment contracts. After all, keeping trade secrets private is an important part of a successful business. The U.S. Patent and Trademark Office notes that one of the conditions for information to qualify as a trade secret is that employers have made an effort to keep it a secret. 

However, these agreements may limit someone’s career prospects severely if they are unfair. The Texas Workforce Commission outlines the enforceability of noncompetition agreements. 

Part of a legal agreement

The rest of the employment contract must be legal and enforceable. If the employment contract has some other clauses that are not legal, the employee may be able to challenge the noncompetition portion of the document as well. 

Reasonable

Reasonableness is often a requirement in legal matters, and this is the area where subjectiveness may enter the challenge. The agreement must be reasonable in these three areas: 

  • Duration 
  • Geographical area 
  • Scope of activity 

The employee should be able to get a similar job that has a different scope of activity that does not put the trade secrets at risk. Courts also generally rule that a reasonable duration is between six months and two years, and that the agreement is not enforceable when an employee moves to a geographical area that has a different clientele. 

No unreasonable burden

In most cases that have gone to court, the judge has ruled in favor of promoting competition rather than limiting it. So, the burden of proof for the case is on the employer to show that enforcing the noncompetition agreement would not create an unreasonable burden on the employee’s ability to continue in his or her career path or otherwise earn a living. 

Employees who profit from their employers’ trade secrets are not likely to win an enforceability challenge.