The Code requires that a non-competition clause be proportionate to the activity limited in time, geographically and in its scope. The agreement must not impose greater restraint than is necessary to protect the good business or other commercial interests of the employer. In addition, it must be enforced at the time of employment and as part or part of an enforceable agreement. While enforcement of non-compete rules remains strong across the country, courts are taking a closer look at whether a worker will face “unreasonable hardship” if their non-compete clause is enforced. Therefore, employers should avoid taking inappropriate positions in court and be prepared to explain why the application of a particular competition permit agreement does not prevent a worker from earning a living. In most cases, a competition agreement should be concluded, in combination with an agreement, in order to prevent a former worker from trying to take over key personnel from the former employer. These clauses are generally referred to as no-pocher clauses. For many companies, the departure of key employees is often followed by the departure of key customers or leads. A well-crafted no-binge agreement can prevent this and protect the company`s customer base. Depending on the industry or the type of services a company offers, a no-debauchery agreement (a promise not to attract the company`s customers) may be a better option than a non-compete agreement (a promise not to compete with the company). A recent appeal case in Houston shows that Texas courts treat them as non-compete rules when deemed enforceable. In this case, an insurance broker was bound by a contract of employment that contained the following provision: Accordingly, the board of directors understands and accepts that for a period of two (2) years thereafter.
Of course it is. The law will not allow a company to circumvent the requirements of the non-competition clause by using only a label other than “competition”. The question is whether the function of the clause is to restrict competition. A non-promotion agreement of the employer`s clients appears to limit competition with the employer and should therefore be treated as a “non-compete obligation”. A recent decision by the Texas Thirteenth Court of Appeals serves as a warning to Texas employers who want to impose their competition bans. In this case, a company that provided surgical assistants for surgical facilities and physicians sued a former employee for violating its 2-year non-compete agreement, which prohibited him from offering his services “in any way” to “client institutions or surgeon clients” of his former employer. It`s pretty easy to see why a no-pocher agreement is a restriction on trade or commerce. Think about that. Imagine apple and Samsung signing a contract stipulating that Apple won`t advertise to smartphone customers in Asia and Samsung in North America. The Department of Justice would be everywhere.
Provisions that prohibit the acquisition of customers are treated as obligations not to compete (and must therefore comply with the requirements applicable to all non-competition clauses). . . .