Dust Off Your Non-Compete Agreement

Texas courts now lean toward enforcing non-compete and non-solicit agreements.  But they may push back on how far your agreement can go.

Your restrictions must be reasonable.  If you've demanded too much of your ex-employees, a court will ding you.  The court will shave down or "reform" your restrictions to make them reasonable.  You'll get only an injunction to stop the ex-employee from breaking the rewritten agreement.

Even worse, the court won't show you the money.  No money damages can be awarded on an unreasonable non-compete or non-solicit until after the court has "reformed" your restrictions.  And that won't happen until sometime after you've filed a lawsuit. You would walk away empty-handed on lost profits for your customers the ex-employee stole before you could launch your lawsuit and the court rewrites your restrictions.

Your only option for money damages would be to prove the ex-employee has used your business secrets against you.  Otherwise, your already stolen customers would be water under the bridge.

That's exactly what happened to one Houston company in a recent case.  The court ruled the non-compete was valid, but unreasonably broad.  No money damages awarded there.  On top of that, the court tossed the company's business secrets claims.  No money there too.

Keep your non-compete and non-solicit agreements deadly by making sure they're reasonable.  Over the past few years, Texas courts have refined how they decide if a restriction is reasonable.  Are your agreements in step?  Have you looked at them to know?