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Money Alone Cannot Buy a Non-Compete Agreement with a Texas Employee

/cdklawyers.com// 08/29/2010

A non-compete agreement prevents an employee (or former employee) from competing with an employer.  Employers enter into these agreements to protect confidential information and to avoid losing customers to competitors when an employee changes jobs.  But, cautions Dallas non-compete attorney Keith Clouse, in order for a non-compete agreement to be enforceable against an employee, the employer must provide adequate consideration.

Money alone fails as adequate consideration for a non-compete agreement.  Under Texas law, an employer’s consideration must give rise to the employer’s interest in restraining the employee from competing.  Texas courts have found that an employer’s consideration is sufficient where an employer provides an employee with confidential information and company trade secrets and/or provides the employee with specialized training.  Because the provision of financial benefits alone does not give rise to an employer’s interest in restraining an employee from competing, a non-compete agreement premised on such consideration would likely be found unenforceable by a Texas court.

Mr. Clouse negotiates non-compete agreements and litigates disputes related to non-compete agreements.  To speak to Mr. Clouse or another employment lawyer about a non-compete agreement, contact the Dallas employment and labor law firm of Clouse Dunn Khoshbin LLP at [email protected].

Press Release Contact Information:

KEITH A. CLOUSE

Clouse Dunn
Khoshbin LLP

214.220.2722
214.220.3833 ( fax)
[email protected]

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