When an executive or other professional is starting on with a company, there are many different employment agreements they may be asked to sign. Sometimes, a noncompete agreement is among these contract documents. Noncompete agreements are agreements in which an employee agrees to certain restrictions on what sorts of employment they could take after their employment with their employer ends.
How enforceable are such agreements here in Texas? Under state law, such agreements generally can be enforced against an employee as long as certain requirements are met.
So, what specific terms a noncompete agreement an employee signs contains can have massive implications for the employee. It could greatly affect what rights and options they would have upon the end of their current employment.
Now, noncompete agreements cannot contain any terms an employer wants. There are some limitations that state law puts on such agreements. For one, it requires that the restrictions such an agreement places on an employee be reasonable and not more restraining than is necessary. Also, there are some special additional limitations for noncompete agreements for physicians.
If a noncompete agreement contains terms that exceed these limits, an employee generally has options for fighting the enforcement of the limit-exceeding provisions. However, doing so can require time-consuming and resource-consuming litigation. Also, as we noted above, terms that do end up fitting within the limits can still be plenty impactful on employees.
This underscores why having a noncompete agreement’s terms carefully reviewed before signing it can be very important for an executive or other professional. Dealing with terms that potentially go too far before signing an agreement could save an employee a lot of trouble down the road. Also, having a clear understanding of what the agreement’s terms would mean for them can prevent an employee from facing unpleasant surprises. Experienced employment law attorneys can review employment contract documents, including noncompete agreements, for executives and other professionals.