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I signed a non-compete — can my employer actually enforce it?

Started by TrappedDev · Nov 8, 2024 · 10 replies
For informational purposes only. Not legal advice.
TD
TrappedDev OP

When I joined my current company (Texas based) I signed a 2-year non-compete. Now I want to leave and start something in the same space. They're threatening legal action if I do.

I know California doesn't enforce non-competes but I'm in Texas. Am I stuck?

TL
TexLaw_Mike Attorney

Texas does enforce non-competes but they must be "reasonable." Courts look at: (1) time period, (2) geographic scope, (3) scope of activities restricted. 2 years is on the longer end but not automatically invalid.

Key question: does your non-compete actually protect legitimate business interests (trade secrets, customer relationships) or is it just preventing competition? The latter gets thrown out.

BN
BigNews2024

FYI there's a new FTC rule that was supposed to ban most non-competes nationwide but it got blocked by federal courts. Still in legal limbo as of now. Worth watching.

FF
FreedFounder

I was in similar situation in Massachusetts. Got a lawyer to send a letter arguing the non-compete was overbroad. My former employer backed down because actually litigating would cost them $100K+. Most companies threaten but don't follow through unless you're truly valuable.

PR
PracticalReality

real question: how would they even know? if you're starting something new with a different company name in a slightly different niche, what are they going to do? monitor your LinkedIn forever?

TL
TexLaw_Mike Attorney

@PracticalReality I wouldn't advise ignoring it. If they find out later (and word travels in industries), they could sue for damages plus attorneys fees. Better to get a legal opinion upfront.

That said, many non-competes are poorly drafted and unenforceable. Worth $500-1000 to have an employment lawyer review yours.

TD
TrappedDev OP

Got a lawyer to review it. She says the geographic scope ("worldwide") is likely unenforceable but the rest might hold up. Suggested I negotiate with them directly - maybe they'll agree to let me go into a different vertical.

NV
NegotiatorVic

pro tip: when you leave, ask for a written release from the non-compete as part of your exit. some companies will give it just to avoid future headaches. never hurts to ask.

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