An increasing number of Texas companies require their higher-level employees to sign non-compete agreements, which places restrictions on where these individuals can work after they resign or are terminated. A poorly drafted non-compete agreement can be the subject of litigation by both employers (who wish to prevent their employees from flouting the terms of the document) and employees (who feel the terms of the document are overly restrictive).
A Non-Compete Agreement Includes Various Restrictions
There is no such thing as a “standard” non-compete agreement, since these documents must be tailored to the specific needs of employees and the companies that hire them. However, the typical non-compete agreement will include restrictions about:
- Type of employment. The employee of a given company is barred from working for a competing company in the same industry. There is no restriction, however, against finding employment in an entirely different field (say, the executive of a defense company being hired by a university).
- Timing. In many non-compete agreements, there is a clause specifying how long the departing employee must wait before finding employment in the same industry. Anywhere from two to five years is standard, though the details will differ according to the type of job.
- Geographical location. Some non-compete agreements allow the departing employee to seek employment in the same industry, but only outside a specified geographical area. Often, the employee will be barred from seeking the same work in any state where his prior company does business.
- Specified competitors. In certain industries, a non-compete agreement will be so detailed that it actually names the companies from which the departing employee is barred from seeking employment. A big-box retailer like Costco, for example, may bar an executive from seeking employment at BJ's Wholesale Club.
The Best Non-Compete Agreements Are Detailed and Airtight
The reason there's so much litigation around non-compete agreements is that these documents are often drafted sloppily and use vague or imprecise language; an “airtight” agreement, on the other hand, speaks for itself.
Are you a Texas employer or employee who is engaged in (or is about to become engaged in) a non-compete clause dispute in Dallas or Fort Worth? Contact Jim Zadeh today at 888-713-5418 to find out what he can do for you!
