Bell Nunnally Partner Kristoper D. Hill authored the Texas Lawyer article “Two Sides, One Coin: The Employer, The Employee, and The Non-Compete.” The piece explores enforceability of non-compete agreements between employers and employees.
Hill looks at best practices for both employers and employees when it comes to non-compete agreements – whose legality varies from state-to-state, with the exceptions of California, North Dakota and Oklahoma which have bans in place.
For Employers:
[A] properly drafted and implemented Non-Compete can be a legal fortress, protecting valuable assets—such as goodwill and relationships with clients and employees—from a departing employee’s competitive action. When drafted or implemented improperly, however, a Non-Compete can result in a “heads—employee wins, tails—employer loses” situation.
For Employees:
Just like a prudent employer, a prudent employee’s first step begins long before the employment relationship ends, but when it begins. An employee should anticipate that a Non-Compete might be buried in that stack of first-day paperwork. Any proposed employment agreement must be taken seriously: employees must thoroughly read and understand the terms before signing.
Hill concludes:
Deciding how to open this conversation with a current prospective or future employer also merits discussion with counsel. As discussed above, a thorough understanding of your Non-Compete—especially its enforceability—will equip you to have an informed, transparent dialogue with all parties.
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Kristopher D. Hill