Business-Minded Legal Solutions

Using non-compete agreements to protect businesses interests in TX, P.1

In recent posts, we’ve looked at the recently initiated patent litigation involving Apple, commenting on the importance of businesses obtaining appropriate legal protections for intellectual property and enforcing taking appropriate action when they are threatened or infringed. As we noted last time, though, it is also important for companies to protect their intellectual property by managing workers who have access to intellectual property and other protected business information.

Managing intellectual property rights and sensitive business information via employment contracts can be done a number of ways. Different workers, whether employees or independent contractors, may require different contractual agreements, depending on the circumstances a company is dealing with and its specific goals. One possibility is to secure an agreement that the individual will not work for a competitor within a certain amount of time after leaving the employer. 

The law surrounding non-compete agreements varies from state to state. Some states are more permissive of non-compete agreements than others. In California, non-compete agreements are void, while other states will generally enforce such agreements as long as they are considered reasonable and meet certain other requirements. Here in Texas, enforceable non-compete agreements must, first of all, be ancillary to or part of an otherwise enforceable employment agreement. This includes at-will employment agreements involving employees’ future promises for which the employer actually performs its promise at the time the non-compete agreement is struck.

Importantly, non-compete agreements in Texas must have reasonable limitations regarding time, geographical area and scope of activity if they are to be considered enforceable. We’ll pick up on this point in our next post.