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Non-Competes in Texas post 2011 Texas Supreme Court Ruling Texas Texas

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  • Non-Competes in Texas post 2011 Texas Supreme Court Ruling Texas Texas

    I am not currently in a non-compete agreement and am considering a potential offer from a new company in the same line of work as my current employer and in the same city. I have suffered through enforcement of a non-compete from a prior employer and will never sign another unless my family is starving, I'm in danger of losing my house, etc. When I met with the new company's CEO, I shared my opposition to a non-compete so as to be clear about my stance and make sure we both were on the same page. However, during the response, the CEO indicated that the new company was considering asking its current senior execs (which I would be) to sign new non-competes to comply with the changes in Texas law and which would provide for a geographic restriction and time limits, etc (the current agreement in place at this new company only enforces a non-compete if departing execs refuse to surrender company stock and/or options).

    Question: can the existing execs be fired for refusing to sign the new agreement? If I joined the company, could I be fired for later not signing a non-compete even though I explicitly stated I would not sign one prior to starting.

  • #2
    Yes, a current or prospective employee can be fired or not hired for not signing a non-complete - there is no law against it. (unless you have a binding employment contract to the contrary)

    This is what Tx says re non competes:
    Texas non competes are generally enforceable if they are ancillary to or part of an otherwise enforceable agreement to the extent that they contain limitations as to time, geographical area, and scope of activity and are reasonable and don't impose a greater restraint than necessary to protect the business. There are specific provisions for non competes to be enforceable against licensed physicians. If the limitations aren't reasonable and impose a greater restraint than is necessary, a court can change the agreement to the extent necessary.

    Before signing any non compete, you need to have it reviewed by a local employment or contract attorney to get his/her opinion as to whether it would be enforceable.
    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

    Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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    • #3
      Yes, it is legal. However, I have seem most companies have employees sign them when they get to a point where they are eligible from something that a normal employee would not be....such as a bonus/stock plan. So it is usually only for a certain level and above.

      It is always best to have a local attorney review any NCA before signing. But once you get to a certain level on a career ladder, they are pretty much expected. You can stick to your principles, but it might be a career limiting move.

      One thing to consider is negotiating either a signing bonus or some type of severance package when you sign the NCA that would cover your pay for the length of the NCA limitation. That is, consider how you can protect yourself without refusing to sign it.

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      • #4
        Agree that "generally" senior executives are going to be asked to sign a non compete where ever you apply for employment at particularly if they are giving you something that other employees do not get. (so expect it)
        Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

        Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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        • #5
          FYI, it is not a great idea to go into an interview for a senior exec position and announce that you refuse to sign a NCA because it caused you issues in a past job. That doesn't just send up red flags, it shoots off fireworks and hires a marching band.
          I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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