The Top 5 Things to Consider When Drafting a Non-Compete Agreement in Dallas
Consider the Legal Implications of Securing Your Trade Secrets in Dallas2 min read
Heads up, business owners and entrepreneurs in Dallas – it’s time to think about the legal implications of protecting your confidential information and trade secrets. After all, you’ve put in the hard work and dedication to build your business, so you naturally want to protect it from competitive espionage. A non-compete agreement can be a powerful legal tool to protect your business interests. This of course carries with it a host of things to consider, especially when drafting non-competes in Dallas. In other words, you’ll need to consider the unique local regulations.
Here are the top five things to consider when drafting a non-compete agreement in Dallas:
1. Geographic Scope
The scope of the geographic area which your non-compete agreement covers is probably the most critical element of the contract. Not only does it dictate where your former employee(s), partner(s), or contractor(s) cannot work, but it can also determine whether or not the non-compete is enforceable.
In Texas, a non-compete agreement is enforceable only within the limits of the geographic area that is reasonable for the provision of protecting the legitimate interests of the employer.
2. Time Limit
Texas generally limits non-compete agreements to no more than two years. If your agreement outlasts two years, then you may be exposing yourself to legal risk. Consider adjusting the timespan of your agreement to something more likely to be enforceable in a court of law.
3. Exclusions
In Texas, there are certain professions that are exempt from non-compete agreements. Those occupations include: a practicing physician, a certified public accountant, an attorney, or an auctioneer. Any non-compete agreement involving employees who fall under one of these professions will be unenforceable.
4. Considerations for Higher-Ups
If you’re planning to draw up a non-compete agreement that applies to a certain executive-level employee, then you should consider additional provisions. s of executive-level considerations include termination on the basis of reasonableness, and limitations to those that are tailored to the specific executive role.
5. Compensation & Severance
Lastly, you’ll need to consider compensation and/or severance payments for both before and after the agreement is signed. This is important since it could be used as evidence that the non-compete was valid and can later stand up in court.
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When it comes to non-compete agreements, it's important to consider local regulation. As any experienced business lawyer in Dallas will tell you, local laws surrounding non-compete agreements can quite nuanced and complex. Before you begin the process of drafting your non-compete agreement, make sure to work with experienced legal professionals who will ensure your agreement stands up to legal compliance and is ready for any potential challenges in the future.
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