QUESTION

Should i sign a non-complete with my employer?

Asked on Sep 06th, 2015 on Labor and Employment - Texas
More details to this question:
I have worked at the same company for almost 35 years - my boss wants his management team to sign an non-complete contract because he is scared that his General Manager might be planning on starting his own company. I don't have plans on leaving but worried that if I sign on day he could at will fire me the next day and I will be locked out of the only industrial I know - What should I do? I'm 54 four years old - I believe I'm paid fairly - no company health insurance but have a company 401K with no match.
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1 ANSWER

Litigation Attorney serving Weatherford, TX
Partner at ROGERS, LLP
2 Awards
The answer to this question is extremely complicated.  You should consult with a private attorney with experience in these matters before you take any action in response to your employer's request that you sign the non-compete agreement.  What follows is a few very general comments on the subject which could be completely inapplicable to you depending on your circumstances and the wording of the proposed agreement. First, most employees in Texas are "at-will" employees who may be fired for any reason or no reason (except illegal reasons [race, sex, age, disability, etc]).  Unless you already have an employment contract which restricts your employer's discretion to terminate your employment, you could be fired with no recourse if you refuse to sign the new non-compete agreement.  However, that fate may be better than signing the agreement. Non-compete agreements are disfavored in the law and will not be enforced unless they are narrowly crafted to provide reasonable protections for an employer's trade secrets or goodwill.  In general, if an employer has already given its employee all of its trade secrets, asking the employee to sign a non-compete after-the-fact in order to protect the trade secrets already provided will usually result in an unenforceable or invalid agreement.  That said, if the employer subsequently gives the employee new trade secrets or new confidential information, the invalid agreement could become valid based on the new information. Non-competes must also be reasonable in terms of 1) time [length of non-compete period]; 2) geographic area [location where competition prohibited]; and scope [activities prohibited] as judged in relationship to the secrets sought to be protected.  So if the employer only sells its goods and services in Houston, a non-compete which prohibits competition in Dallas may be unreasonable.  Non-competes longer than 3-5 years are generally not enforced.  But 1 year may be too long if the secret (e.g. price list or customer list) changes or becomes public knowledge in a shorter time-frame. Non-competes can be very expensive to litigate for both the employer and the former employee.  However, because of the high costs of litigating these agreements, these disputes frequently settle quickly. Finally, with or without a non-compete, an individual cannont steal or take his fomer employer's trade secrets and give them to or use them against the former employer.  The Texas Uniform Trade Secrets Act, provides for damages, penalties, injunctions and attorneys fees if this conduct occurs, even if there is no non-compete agreement.
Answered on Sep 07th, 2015 at 8:03 PM

The forgoing is for general information purposes only and does not constitute legal advice or establish an attorney-client relationship.

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