Noncompete agreements are common tools employers use in Texas and elsewhere to protect their competitive edge. In exchange for work and sometimes training, employees agree not to start or work for a competing business for a certain length of time after leaving a position. Many states enforce these with austerity.
According to Texas Workforce Commission, state law establishes means for creating a legally enforceable noncompete agreement while also leaving room for professionals to get out from under unreasonable contracts.
Vulnerable noncompete agreements
Texas tends to dismiss contracts that are too nonspecific or do not contain reasonable limits on geography, time and scope. Agreements should outline specific and reasonable parameters that are demonstrably linked to the business’ competitive edge. If the contract does not include specific activities that professionals can and cannot do, they are less likely to hold up under scrutiny.
“Common calling doctrine” dictates that noncompete agreements are typically less enforceable for low skilled workers. The more highly skilled a worker, the more reasonably a court will perceive the threat to competition. Likewise, a noncompete for general skills may cause more damage to the worker than it benefits the market.
Enforceable noncompete agreements
Noncompete agreements exist to foster competition in the market — to that end, the law sacrifices some individual careers in deference to the larger economic benefit. In Texas, an enforceable noncompete agreement will recognize this goal without unnecessarily impacting a professional’s rights to practice and earn a living.
The University of Texas claims that state law tends to prefer noncompete contracts that offer some sort of training or benefit to employees in exchange for their compliance. Some agreements even use stock options as incentives.