Nationwide, businesses have used noncompete agreements as part of employment terms to prevent former employees from turning into competitors. Many consider these agreements critical to maintaining their position in a marketplace that is already highly competitive. However, there is a legislative tide turning and state legislatures, as well as some employers, around the country are beginning to question this practice. Will Texas be far behind?
On August 7, 2017 the federal 5TH Circuit Court of Appeals again decided a case holding that requiring job applicants to sign a class and collective action waiver and subsequently enforcing that waiver does not violate §8(a)(1) of the NLRA. In this case, unlike the D.R. Horton and Murphy Oil cases the context did not involve an arbitration agreement. The non-unanimous opinion was issued in Convergys Corporation v. NLRB. Until a decision is reached by the U.S. Supreme Court there remains a split in the Circuits about this issue so caution should be exercised by attorneys and employers in relying on the opinion.