Texas Employment Law Attorney Assisting with Non-Compete Agreements in Austin
Many Austin employers frequently require employees to execute non-compete agreements, also known as covenants not to compete, in order to prevent employees who separate from employment for working with a competitor. These agreements may be presented to employees when they first start employment, or even years after the employee starts working. It is extremely important for employees to know that non-compete agreements significantly restrict their ability to engage in the same type of work for years after separation of employment from the employer—regardless if the employee quits or is terminated from employment.
In order for non-compete agreements to be enforceable, Texas law requires that they must contain reasonable terms and conditions regarding the time, scope and geographic location that restricts post-employment competition.
If you are presented with a non-compete agreement in an employment contract, or simply in a separate document to execute when you are hired, or while employed, you should have the non-compete document reviewed by an Austin non-compete agreements lawyer before you execute the document. We have years of experience serving Texas employees and executives, and we can assist with understanding your duties, rights and responsibilities concerning non-compete agreements and the long term effect it can have on your future employment opportunities.
What is a Non-Compete Agreement in Austin, Texas?
A non-compete agreement, or a covenant not to compete, is one type of “ restrictive covenant” that limits an employee’s ability to perform certain work if and when that employee leaves the position with the current employer. While there are many types of restrictive covenants that can limit what an employee can do, a non-compete clause or agreement is a contract between the employee and the employer that says the employee will not engage in any competition with the employer during the term of employment, or for a certain amount of time after the employment ends— regardless if the employee is fired or quits employment. Employees may be prevented from obtaining a competitive position for years after their employment ends, regardless of the reason for separation.
Generally speaking, non-compete agreements need to be reasonable in terms of time, scope and geographic location in order for them to be enforceable. Even if one of those terms may be overbroad, or unreasonable, the law allows a Court to modify, if possible, the term to make it enforceable against the employee.
How Texas Law Defines Enforceability for Covenants Not to Compete
Section 15.50 of the Texas Business and Commerce Code outlines the criteria of enforceability of covenants not to compete. According to the statute:
“[A] covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promise.”
To put that another way, in order for a non-compete agreement to be enforceable, all of the following must be true of the agreement or clause:
- Limited in terms of time;
- Limited in terms of geographical area;
- Limited in terms of scope of activity that is being restrained; and
- Limitations do not impose more of a restraint than is necessary to protect the employer’s business.
Covenants not to compete for physicians licensed by the Texas Medical Board have additional requirements to be enforceable. The non-compete agreement cannot deny physician access to a list of patients who have been treated within the past year, and physicians must be provided with access to patients’ medical records when they have appropriate authorization from the patients. Physicians also need to have an option for a reasonable buyout in an enforceable covenant not to compete, as well as a promise that a physician will be permitted to continue providing care to patients with an acute illness.
What Austin Employees and Executives Should Know About Non-Compete Agreements
If your employer asks you to sign a non-compete agreement, it is important to discuss that agreement with an Austin employment law attorney before signing anything. You may be able to negotiate the terms of the covenant not to compete, or it may be clear to your lawyer that the agreement contains unfair or unenforceable terms. You need an Austin employment lawyer to help you understand the terms and conditions that may prevent you from working in your job for a competitor for years.
Whether you are presented with a non-compete agreement when you are first hired with a company, or in an employment contract, or at some point after you begin employment, you should seek advice from an Austin employee rights lawyer before you sign the non-compete agreement. It is important to understand if the restrictive covenant will prevent you from obtaining similar employment in the Austin area and, if so, how long you might be prevented from working in the same profession.
Employees may be able to contest the terms and conditions of a non-compete agreement by demonstrating that it contains unreasonable restrictions as to time, geographic area, or scope of activity.
If you signed a non-compete agreement, an employer may seek to enforce it against you when you start working for a competitor—even if the non-compete agreement may be unreasonable. You need to know your rights, duties and obligations, as well as the company’s duties and obligations, regarding any non-compete.
Non-compete agreements restrict your ability to work in the future. You need the advice of an Austin Non-compete lawyer to protect your right to work.
Contact an Austin Non-Compete Agreement Lawyer
Do you have questions about a non-compete agreement? An Austin non-compete agreement attorney can speak with you today. Contact the Law Office of Jeffrey A. Goldberg for more information.