Understanding The Parameters Of Noncompete Agreements

Employees, managers, partners and other business members have access to valuable information. When they leave the business, that information can give them a leg up in undercutting their former company's interests. In an economy where even the slightest competitive edge can make or break a business, the risk posed by former employees or business partners is readily appreciable.

Noncompete agreements serve to protect business interests over the long term. They set parameters on the activities of former employees or business members, essentially serving as a buffer around business interests.

The Importance Of Reasonableness

Noncompete agreements are common in many types of employment contracts. They may also be included in a business owner's buyout agreement or in contracts concerning the sale, merger or acquisition of a business.

In each of these contexts, the agreement must be reasonable with regard to three key aspects:

  • The scope of the activities it limits
  • The geographic area it applies to
  • The duration of the restraint

Texas law spells out additional requirements for noncompete agreements, depending on the activities and industries involved.

An unreasonable noncompete agreement may not be enforceable. For this reason, it is important to understand the implications of the agreement — and to ensure that it is well-drafted — from the outset.

We Understand Business Contracts

At Stephen Kaplan, P.C., a Dallas-based business law firm, we provide guidance on negotiating, drafting, enforcing and challenging noncompete agreements. Our attorney is a seasoned litigator and negotiator with nearly 40 years of experience in the business law context. He has a thorough understanding of all types of business contracts, including not only noncompete agreements but also nondisclosure agreements and employment contracts.

To speak with lawyer Stephen Kaplan about a noncompete agreement during a complimentary initial phone consultation, call our office at 214-346-6048 or send us an email.