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3 Misconceptions About Texas Non-Competes

There are many misconceptions about covenants not-to-compete under Texas law. I hear them often from clients and potential clients. I'm not sure if they get these misconceptions from the internet or co-workers. To the extent they come from the internet, consider this my effort to clean up the blogosphere a bit on this issue. Here are three common misconceptions about non-competes under Texas law:

1. Non-competes aren't really enforceable in Texas. Not true. They are now easier than ever to enforce because of some Texas Supreme Court rulings over the past few years. If a lawyer tells you non-competes aren't really enforceable in Texas, find a new lawyer.

2. An employer cannot require you sign a non-compete after you've been hired. Wrong again. Texas is an employment-at-will state. An employer can require you sign a non-compete after they hire you--even years after--and they can terminate you if you refuse, and you will probably have no recourse. I only say "probably" because there is an exception for fraudulent conduct, but that is the very small exception, not the rule.

3. If the non-compete is not enforceable you can't be sued. Sorry. You might beat the rap but you won't beat the ride. If you are sued and you can't afford to defend yourself, the non-compete will probably be enforced even if it is unenforceable. If you can afford a lawyer to defend yourself and you win, unless the contract provides for the prevailing party to recover attorney's fees, you will be stuck with having to pay your own attorney's fees. There is a provision in the Texas non-compete statute that allows for the defending party to recover attorney's fees, but it is not often applicable.

If you've signed a non-compete agreement, talk to a board certified employment lawyer about your rights. GSF
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