While the Coronavirus (COVID-19) was disrupting everyone’s lives, Palmer Lehman Sandberg worked to achieve a balance – continuing to take care of our clients’ legal needs, while protecting our clients, our employees, and our community (local and nationwide).

As Texas has begun to reopen, Palmer Lehman Sandberg has adjusted accordingly.

  • We are available for in-office meetings, with the following protections in place – while in our building and our office common areas (lobby, elevators, hallways, etc.), visitors must wear face coverings, and maintain social distancing (minimum 6’) as much as possible.
  • We continue telephone and video conferencing in place of face-to-face meetings, for those who prefer it.

As we continue to serve you, we wish everyone safety and good health as together we move forward through these uncertain times.

Please reach out to anyone at our firm via email or phone with any questions or concerns.

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What you need to know about enforceable non-compete agreements

| Nov 26, 2014 | Business Litigation |

In today’s economy, ideas and information tend to be much more valuable than manufactured products. Many Texas businesses, large and small, understand that trade secrets and intellectual property need to be protected, especially from competitors.

One of the most important ways of protecting your company’s proprietary or confidential information is by having your employees sign non-compete agreements. The terms of these agreements vary, but it is common for companies to prohibit former employees from working for a competitor for a certain period of time or within a certain geographic area.

Non-compete agreements are recognized by Texas courts, but they may not be enforced (or considered valid) unless they meet several criteria. Key among these is that they must be considered reasonable.

The terms of the agreement need to be reasonable in both scope and duration. If you put a geography restriction in the agreement, for instance, it could not be so broad as to prevent a former employee from working anywhere else in Texas. Nor could you include a duration of, say, 10 years. What is considered “reasonable” will depend on the specific facts in a given case.

Next, non-compete agreements must protect only legitimate business interests. Provisions cannot simply punish an employee for quitting by imposing restrictions that have little or nothing to do with the actual interests of the company.

Finally, courts generally require that employees receive some benefit in exchange for signing the agreement. If the agreement was signed as a condition of getting hired, the job would likely be a sufficient benefit. But the same might not be true if an employee is asked to sign a non-compete agreement after working for the company for several years. The “value” of keeping a job he already has would likely not be sufficient benefit. The only exception to this would be a promotion within the company or a similar perk.

Non-compete agreements are an important way to protect your business. But in order to be effective, they must be enforceable. An experienced business attorney can help your company draft enforceable agreements and help you litigate when former employees violate them.