Recently we have been discussing the topic of non-compete agreements. In order for such a contract to be considered enforceable by most Texas courts, it should be fair to all parties involved – namely, the employee as well as the employer. Some people may argue that signing a non-compete agreement limits an employee in his or her future career options.
According to the Texas Workforce Commission, enforceable non-compete agreements in the state should be reasonable as to the time limit, geographical area and type of work after an employee leaves a business. The employer must demonstrate that the former employee’s work could harm the company, rather than promote healthy competition. It should also not unfairly restrict the employee from earning a living.
More industries are drafting non-compete agreements into their employment contracts, states The Washington Post. Traditionally, these contracts were mainly seen with executives or tech positions. Now, some businesses such as restaurants or retail stores are requiring employees to sign an agreement not to work in a similar profession for a certain amount of time after leaving the company. This has caused a rise in employment lawsuits as workers in lower-wage industries leave a job only to have their employment options limited.
Despite the potential for business litigation, about one out of every four workers today have signed some type of non-compete agreement during the course of their career. These contracts can be healthy for both workers and bosses, however. For example, states in which non-compete agreements are strongly enforced tend to have better-trained employees, who in turn may be more loyal assets to their companies.
Non-compete agreements can be a valuable employment tool that benefits everyone as long as their terms are fair and reasonable.