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Requirements for Non-Compete Contracts

On Behalf of | Jun 23, 2017 | Firm News

Occasionally, businesses depend upon secrecy to have the edge over the competition. In order to protect that confidentiality, they might have all new employees sign non-competition (non-compete) agreements before beginning work there. They are used to protect trade secrets or goodwill. However, courts tend to disapprove of these contracts as limitations on a former employee’s right to earn a living. In all cases concerning a non-compete agreement, therefore, the court carefully examines these agreements to ensure there is no unfairness in the case.

In order to legally have a non-competition agreement, a business must meet the following requirements:

  • It must be supported by consideration at the time of signing.
  • It must protect a legitimate business interest of the employer.
  • It must be reasonable in scope, geography, and time.

Additionally, employees must receive something of value in exchange for the promise of refraining from competing with the employer or former employer. If signed before beginning work at a company, the work itself is considered sufficient compensation for signing. However, if an employee signs a non-compete agreement after beginning employment, the employer can’t merely promise the continuance of work. The employee must receive something additional in value in exchange for the pledge, such as a promotion or other added benefit that was not part of the original terms of employment.

If you’re concerned about your non-compete contracts, don’t hesitate to call Patricia M. Davis, Attorney at Law. She is an extremely skilled Houston contract lawyer who has more than 30 years of experience in this area of business law. She provides her clients with a one-on-one working relationship that allows a business owner to feel secure in his or her legal counsel. Likewise, she was a former Bankruptcy Counsel for the federal government, so she is well acquainted with the complexity involved in many business transactions and understands how best to resolve these complicated legal issues. Let her see how she can help your case. Attorney Davis is licensed to practice in both Texas and Oklahoma. Contact her at 713-936-9553 or fill out an online form to schedule your personalized initial consultation today.