Most people, particularly those in certain industries, are familiar with non-competition (“noncompete”) agreements. What people often don’t realize is that a noncompete clause is often included in various agreements that people sign when they start a new job. They may agree to it without realizing what they’ve done if they don’t have legal guidance when reviewing or negotiating those employment agreements.
Noncompete agreements aren’t as widely used as they used to be. In fact, some states have largely prohibited them. Texas isn’t one of those states — but the state has imposed limitations on such agreements.
Under Texas law, for a non-competition agreement to be enforceable, it must be “ancillary to or part of an otherwise enforceable agreement” and it also must include “reasonable limitations as to time, geographical area, and scope of activity.” Employers cannot place an undue burden on a person’s ability to earn a living in their chosen profession after they leave that employer.
These agreements are negotiable
An employer shouldn’t discuss a noncompete agreement until after they’ve made and you’ve accepted a job offer. Then you have the right to negotiate the terms of that agreement.
- You can negotiate things like the following:
- Ask for more clarity if the language is too vague
- Seek a smaller geographic area.
- Seek a shorter time period.
Some people ask for a larger salary and/or more perks in exchange for accepting a period of time during which they can’t work for a competitor that is longer than they’d prefer. That can help offset the potential financial consequences of not accepting the kind of job you’d like to do for a time when you eventually leave.
When you’re offered a coveted position, it can be natural to agree to your new employer’s terms with few questions. However, it’s important to your future to protect yourself and your professional and financial future. Having legal guidance in reviewing and negotiating any agreements you sign can help you do that.