Non-Compete Agreements

Houston Non-Compete Agreement Attorneys

Drafting & Enforcing Non-Compete Agreements in Texas

To protect your business or practice from unfair competition, you need a comprehensive noncompete agreement that covers all the bases. At Hendershot Cowart P.C., our Houston-based business law firm works with employers, executives, employees, and independent contractors – as well as buyers or sellers of a business – to draft, review, negotiate, and implement non-compete agreements that are detailed, enforceable, and mutually agreeable.

In addition, our non-compete lawyers routinely defend or pursue claims that a non-compete agreement has been violated.

For prompt attention to your non-compete agreement concerns – beginning with a confidential consultation – please call our business law firm at (713) 909-7323 or complete an online form. We welcome client inquiries and referrals from Houston and throughout the state of Texas.

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Here's What our Experienced Non-Compete Lawyers Can Do for You

  • Draft non-compete agreements and restructure other contracts to ensure you have enforceable, business-critical protections in place. All Texas non-competes need to be specific and limited regarding geographical area, scope of activity, and period of time because no employer has the right to limit an individual’s business indefinitely; doing so would likely make the agreement unenforceable.
  • Enforce non-compete agreements using all available legal remedies. If you believe a current or former employee has stolen your proprietary, confidential information or has improperly joined a competitor or client, our Houston non-compete law attorneys can help minimize the damage and prevent misappropriation of intellectual property.
  • Defend against non-compete violation claims and misappropriation of trade secrets using the best available defenses, including employer breach of contract, an overly broad scope of restrictions making the agreement not enforceable, or illegitimate business interests. We have represented both employers and employees in non-compete violation claims.
  • Have you been asked to sign a non-compete? We review and negotiate agreements and other restrictive covenants for prospective employees in need of clear guidance on their rights and options before signing an employment contract, especially with a non compete clause. No employer has the right to contractually prohibit an individual’s business indefinitely; non-competes must be reasonable in their restrictions to be enforceable. Executives may have many special considerations that require additional negotiations and modifications.

What Makes a Non-Compete Agreement Enforceable in Texas?

Depending on the work you do and the information your company processes, your business has the potential to live and die by the strength of your non-compete agreements. But not every non-compete agreement is created equal.

To be enforceable in Texas, a non-compete agreement must:

  • Be ancillary to an otherwise enforceable agreement, such as an employment agreement
  • Be in exchange for “consideration” (i.e. something in return, such as specialized training or confidential information)
  • Be reasonable in scope of activity
  • Be reasonable in geographic area
  • Be reasonable in duration / time limits

If a court deems any of these elements to be broader than necessary to protect the interests of the business, the court can reform or nullify the agreement. The attorneys of Hendershot Cowart P.C. can advise you on reasonable limitations for your specific industry. We can also identify which elements can be challenged should you seek to get out of a non-compete agreement.

Are Non-Compete Agreements in Texas Enforceable If the Employee Is Terminated?

What happens if an employee is fired or laid off? A non-compete agreement is still enforceable in Texas if an employee is terminated – regardless of the reason – assuming the agreement is reasonable in scope and duration, and meets the other criteria outlined above.

How Do You Enforce a Non-Compete Agreement in Texas?

A common method of seeking relief in the face of competitive harm or employee restriction in non-compete disputes is to seek a temporary injunction (TI) or temporary restraining order (TRO). This will allow the injured party time to construct a defense and also stops the potentially injurious activity – that's why it is critical to act quickly. Constructing a thorough defense can involve gathering evidence, witness testimony, and relevant documentation.

To obtain an order it must be shown that damages will occur unless the TI or TRO is granted by the court. While “irreparable injury” typically refers to that which cannot be compensated for or measured against a specific standard, precise interpretations can vary from court to court. Considering the speed that businesses move in our technological age, if you are involved in a dispute (or believe that one is on the horizon), there is no time to waste.

In order to secure a temporary injunction in Texas, an applicant must show that:

  • A cause of action occurred
  • The petitioner has a right to the relief
  • There exists a probably, imminent, and irreparable potential for damages
  • There is no other adequate remedy at law

Damages in these cases can take many forms. For example, in a misappropriation case, a party may be able to recover profits from the use of trade secrets, the value an investor may have paid for the information, as well as potential royalties.

If you have questions or concerns about a non-compete agreement and whether it is enforceable, please contact the Houston non-compete attorneys at Hendershot, Cowart P.C. at (713) 909-7323.

What Should Executives Consider Prior to Signing a Non-Compete Agreement?

Executives often have greater leverage in negotiating their terms than other employees due to their position and value to a company. Because they also impact one’s professional options in the future, executives should work with attorneys to thoroughly review the terms and conditions, and negotiate modifications when necessary. From the viewpoint of a senior executive, preserving future and post-employment opportunities are of the greatest concern.

We help executives review their non-compete agreements with a focus on how the agreement may impact professional options in the future or create exposure to future limitations or violations. Our business legal team has decades of experience facilitating these mutually agreeable negotiations and modifications of executive non-compete agreements.

Special Considerations for Texas Physician Non-Compete Agreements

Because physician non-compete agreements can impact doctor-patient relationships, Texas law has special requirements above and beyond the elements of an executive non-compete agreement.

Specifically, physician non-competes must allow doctors:

  • Access to a list of patients treated within the year preceding the separation from the practice
  • Reasonable access, upon patient consent, to relevant medical records
  • To provide for patients who need acute care even after the contract or employment has been terminated
  • To buy out of their agreement, if they choose, at a reasonable price, or, upon mutual consent, for a price set by a neutral third party

With a thriving practice in both business law and health care law, Hendershot Cowart P.C. is uniquely suited to draft, negotiate, and review non-compete agreements for physicians, medical professionals, and hospitals practicing in Texas.

Your Texas Non-Compete Law Firm – Contact Hendershot Cowart P.C. Today

Like all legal contracts, a non-compete agreement (also known as a covenant not to compete) should be entered into with clarity. Companies that use outdated templates or improperly drafted agreements can suffer severe financial repercussions should those agreements turn out to be unenforceable.

Our law firm has been reviewing, drafting, and enforcing non-compete and non-disclosure agreements since 1987. If you have questions about the language of your employment agreement, or need to draft or enforce a non-compete clause, call our non-compete lawyers and draw from our decades of experience with non-competition agreements.

Frequently Asked Questions About Non-Compete Agreements

Non-compete agreements are complex contracts that inspire many questions. Our attorneys at Hendershot Cowart P.C. have set out to answer some of the most common ones below:

Are Non-Compete Agreements Negotiable?

Yes. Many people erroneously assume that non-compete agreements are non-negotiable. Before signing a non-compete agreement, consult with a contract law attorney with experience drafting and litigating non-compete agreements to make sure the agreement is lawful and fair. If there is a problem with the agreement, notify your employer. For example, you can insist on greater clarity if the non-compete is vague or overly broad. You can also reduce the scope of a non-compete in terms of geography and length of time. If all else fails, you can always use the non-compete as leverage on another issue. Try asking for a higher salary or additional benefits in exchange for signing a non-compete agreement.

In some cases, you may be able to avoid signing a non-compete agreement entirely. Ask your employer if you can replace the non-compete with a non-disclosure agreement (NDA) or non-solicitation agreement, so you do not have to sacrifice future potential employment opportunities.

To Be Enforceable in Texas, a Non-Compete Must Provide Adequate Consideration to the Employee. What Forms Should that Consideration Take?

Non-competes are valid and enforceable if they are ancillary to or part of an otherwise enforceable agreement and provide adequate consideration to the employee for entering into the agreement.

Employment is typically sufficient when agreements involve new employees. In the case of existing employees, however, additional consideration such as a promotion or pay raise may be necessary.

I Signed a Non-Compete With my Previous Employer, Is It Safe to Start My Own Business?

It depends. Some non-compete agreements are unenforceable and will not interfere with your efforts to start your own business. However, if your business idea is in direct violation of a non-compete agreement that is reasonable and likely enforceable, you may need to wait until the non-compete expires or relocate outside of the restricted geographic area to start a successful business without the threat of litigation.

To better understand your unique situation, discuss your case with an attorney.

Can I Work for a Competitor After Signing a Non-Compete?

Once again, it depends. If your non-compete is overly broad in geographic area, scope of activity, or duration, the court may not enforce it as written and may reform it with reasonable restrictions. However, if you have plenty of employment options and you choose to work for a competitor or start your own business in competition with a former employer, a reasonable, properly drafted non-compete may be enforced.

Typically, non-compete agreements only apply to a certain business activity, in a certain geographic area, for a certain length of time. If the non-compete you signed is too restrictive or is not specific enough, or if the underlying employment agreement was breached by your employer, you may be able to demonstrate to the courts that the agreement should not be enforced.

Sometimes, the activities you perform for a competitor will not violate the terms of your non-compete agreement, even if you are working in the same industry. An attorney can review your non-compete agreement, assess the details of your situation and advise you (and your new employer) appropriately.

Can I Hire Someone Who Signed a Non-Compete?

If you hire someone with a non-compete agreement in place, both you and your new employee will be exposed to potential litigation. Ask your legal counsel to review the candidate’s non-compete agreement and advise you on whether the agreement is likely to be enforced or if there may be a strategy to exit the agreement.

Your attorney can also clarify which business activities are restricted by the non-compete agreement. You may be able to construct a work role for the prospective employee that does not directly violate the terms of the non-compete agreement – at least until the agreement expires.

Above all, be aware that you are exposing yourself to risk by hiring someone who signed a non-compete – and be prepared to face litigation. Work with your attorney to determine what would happen if you or your employee were sued and start building your defense long before the lawsuit emerges.

Hendershot Cowart P.C. is committed to your success, and we want to be your law firm for life, so if you haven’t worked with us before, please take a moment to introduce yourself.

For answers to your non-compete questions and case-specific legal advice, schedule a consultation by calling (713) 909-7323 or send us a message online.

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