In this episode, Jason talks about what is required for a noncompete to be enforceable under Texas law.
As always, you can schedule a call through Calendly, peruse past episodes, check out the Keith Law website, or contact me through my LinkedIn profile.
EPISODE-SPECIFIC LINKS:
- Supplementary materials.
- What is a "cause of action?"
- Do you know what "consideration" is, in the contract context?
- Ep021—What is a Contract? This is where you can find my discussion of "consideration."
- Ep001—Discussion of participatory liability.
- Ep010—What is a Trade Secret, and Why Should I Care?
- Ep011—The Trade Secret Misappropriation Cause of Action.
TIMESTAMPS:
00:00 — Two competing myths: "noncompetes are never enforceable in Texas," and "noncompetes are always enforceable."
00:20 — Intro
00:44 — Received wisdom can be wrong.
01:08 — Although many noncompetes are unenforceable, since 1989 noncompetes can be enforcible in Texas if they comply with the statute.
01:35 — To be enforceable, the statute requires a noncompete to be (1) ancillary to an otherwise enforceable agreement, (2) be reasonable in terms of time limit, geography, and scope of restriction, and (3) be supported by consideration reasonably related to the business interest sought to be protected.
02:25 — But first, some discussion of the competing public policies at play.
04:48 — Element 1—ancillary to an otherwise enforceable agreement.
06:22 — Element 2—reasonable in terms of time limit, geography, and scope of restriction.
07:44 — Element 3—supported by consideration reasonably related to the business interest sought to be protected.
12:12 — There are special rules for physicians and attorneys (not discussed in this episode).
12:36 — Why can noncompetes be important? They can help protect a business's competitive advantages.
13:12 — Third parties can have liability for employing someone who is violating a noncompete.
13:43 — Assignment of noncompetes in the context of sale of a business.
14:21 — Takeaways from this episode.
14:55 — Subscribe, check the show notes, and email or schedule a call with your questions.
15:30 — Outro
Disclaimer: This audio and blog post are for informational purposes only and should not be misinterpreted as legal or other professional advice. If you have a legal question, you should consult with an attorney in your jurisdiction. Thank you for tuning in to Keith Law, PLLC.
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