1400 Gables Ct #103 Plano, TX 75075
5601 Bridge Street, #300, Ft. Worth, TX 76112

Dallas Business Law Attorney Discusses Breach of Non-Compete Agreements and Covenants

Dallas business law attorney, Richard “Ric” Armstrong, takes a look at the complicated issues surrounding non-compete agreements (also known in Texas as “covenants not to compete”).

If your business could suffer harm from employees who engage in activities that compete with your business, you may opt to include a non-compete agreement (in Texas, a/k/a “covenant not to compete”) within another legally binding work agreement. But what if an employee of yours violates this agreement? What solutions do you have, if any?

Potential Legal Remedies

Since Texas law favors competition, it can be difficult to enforce a non-compete agreement unless it is structured a certain way. Standalone non-competes, for example, are unenforceable here. However, the Covenants Not to Compete Act does provide legal recourse if your covenant meets the following criteria:

1. It is ancillary—meaning it is attached as part of another agreement recognized and enforced by Texas law; and

2. Its terms are “reasonable”. This term reasonable can be broadly interpreted, but generally speaking, your covenant should restrict competition only within a specified geographic area and/or for a certain length of time. What is reasonable may vary from industry to industry, as well a the size and reach of your business.

If your covenant not to compete meets these criteria, you may be able to petition the courts to enforce the agreement on the offending employee. Remedies here may include financial damages and injunctive relief (meaning the court orders you to cease the offending activity on penalty of contempt of court).

Should You Take Legal Action?

Many times, employees violate non-compete agreements out of ignorance, meaning they didn’t realize what they were signing or what constitutes a breach. Before you file suit on a current or former employee, you might want to approach the person first to discuss the violation; you may be able to resolve the problem with a single conversation. If your covenant is structured properly, if you can demonstrate specific incidents where your business is being harmed and if the employee makes no effort to curb the activity, you may have just cause to pursue a legal remedy.

Since breach of non-compete agreements can be difficult to enforce, always consult a Dallas business law attorney to consider your options first. For an appointment, call Armstrong The Law Firm, P.C., today at 972-424-L-A-W-S (5297).

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Armstrong The Law Firm, P.C.
Plano Location
1400 Gables Ct #103
Plano, TX 75075

Fort Worth Location (By Appointment Only)
5601 Bridge Street, Ste. 300
Ft. Worth, Texas 76112

Phone: (972) 424-5297