— Noncompete Agreements Category Archives — Dallas Employment Lawyer Blog Published by Dallas, Texas Employment Lawyers

Texas Non-Competes Under Fire: What Employees Need to Know About Protecting Their Career Mobility

October 10, 2024 | justia.admin

Recent updates in Texas non-compete law have crucial implications for employees, particularly around job mobility and access to career opportunities. In August 2024, the U.S. District Court for the Northern District of Texas blocked the Federal Trade Commission’s (FTC) proposed nationwide ban on non-compete agreements, a rule that was set to eliminate these restrictions across the country. This decision preserves the enforceability of non-compete clauses in Texas, but it also signals ongoing legal battles that may ultimately shape the future of employee protections.

Here’s what employees should know about the current state of non-competes and how this affects them:

1. Ongoing Use of Non-Compete Agreements

Anti-Poaching Agreements May Leave Employers with Egg on their Face

March 31, 2023 | Robert J. Wiley

Dallas Employment Trial Lawyer Rob Wiley

A no-poaching agreement is an agreement between two or more companies not to hire or solicit each other’s employees. It could be a contract between two companies in the same industry. It could be a contract between a company and a vendor.

It’s easy to see why employers might be tempted to use non-poaching agreements, particularly in a tight labor market with low unemployment. But the reality is that non-poaching agreements suppress competition for labor and limit employee mobility. This will result in lower wages and benefits for workers. This is particularly abusive to the worker who loses out on a job because the new employer is bound by an agreement the worker never signed (and may not even know about).

What are my options if my employer forces me into court far from home?

August 18, 2022 | Austin Campbell

Summary: This article discusses some strategies, including different contract clauses, that employers might use to try to control where you can sue them, or to try to sue you in a far-away place.

If you are in a legal dispute with your employer, where the lawsuit is filed can make a big difference. That affects who the judge is or who might be on the jury. Exactly where a lawsuit can be filed depends on the nature of the legal claims in it. However, two basic principles generally apply. If there are multiple permissible options of where to file suit, the party filing suit gets to choose where to file suit. However, the location must be somewhere that has “personal jurisdiction” over the defendant—i.e., the defendant has to have sufficient connections to the location for it to be legally “fair” to sue them there. This article, however, explores ways that employers may try to get around these basic principles through contracts containing “forum selection” or “venue selection” clauses.

While Texas is an at-will state and sometimes you may have next to nothing in writing from your employer that controls the terms and conditions of your employment, your employer might force you to sign things like a non-compete or an arbitration agreement as a condition of employment. Those may contain language trying to force any disputes to be heard somewhere specific to get around the usual rules for where they should be heard.[1] This can potentially result in situations where you, a Texas employee, are either sued or have your lawsuit moved to a location far from you or even out of state. This might also result in non-Texas employees being sued or forced to only sue in Texas.

Cunning companies may try to circumvent Texas’s “conflict of law” rules for non-competes: what that means and what to watch out for

January 27, 2022 | Austin Campbell

Summary: This article discusses Texas conflict-of-law rules as they apply to non-compete agreements, and some ways that employers may try to get around those rules.

Various articles we have published address in general what a non-competition agreement is and what is required for one to be enforceable in Texas. But with Texas increasingly becoming a hub for large or even multinational companies, it can be much more confusing for workers to figure out what a non-compete their company insists they sign even means. That is especially true as companies may demand that employment documents be governed by some other state’s laws, or even another country’s.

This arcane choice can have profound consequences. Other states’ non-compete laws may be more protective of employees, or instead may allow an employer to get away with more restrictive limits on you. If you are dealing with a contract governed by some other state’s law, it may be a good idea to consult an attorney licensed in that state. However, even if you are in Texas, you should also ask yourself whether your employment agreement subjects you to another state’s non-compete laws, and what that might mean. This article is meant to give a basic overview of Texas’s so-called “conflict of law” rules when it comes to non-competes, as well as some closely related non-compete pitfalls.

Settlement and Severance Agreements: My employer is giving me money in exchange for my soul

August 10, 2020 | Rob Wiley, P.C.

Perhaps you resigned or were terminated or laid-off. On the other hand, you may have sued your employer for discrimination or some other sort of unlawful action. Either way, one of those events caused your employer to offer you a settlement or severance agreement. In exchange for signing the agreement, you will receive a payment, but also give up your right to pursue legal action against your employer, among other things.

If you are presented with a settlement or severance agreement, it is imperative that you read the agreement carefully and, if possible, get advice from an experienced Dallas Employment Lawyer. Typically, you will be allotted 21 days to review and sign the agreement, which provides you ample time to consult with an attorney. Oftentimes, companies sneak many clauses in the agreement that may come back to haunt you. Hence, consulting with an experienced employment lawyer is important.

Why Employees Should Avoid Arbitrating Their Texas Employment Law Cases When Possible

October 10, 2018 | Law Office of Rob Wiley, P.C.

When a Texas employment issue arises, there are several methods by which it can be resolved. Traditionally, the aggrieved employee would file a lawsuit in a court of law with the intention that a judge or jury would ultimately resolve her or his claim.

However, over the years, alternate means of settling claims have become more and more popular. For example, in a recent blog post, we discussed how mediation may be a good way for an employee to resolve an employment claim. This is because the mediation process involves a trained expert helping the parties come to a mutually acceptable solution to the issue. If the parties cannot come to a final agreement, then neither is bound by what occurred during the mediation or by any recommendations of the mediator.

Another form of Texas employment dispute resolution is called arbitration. Arbitration is much less favorable for Texas employees. The process involves a private, non-judicial decision-maker, called an arbitrator, who hears a case and issues a decision. Unlike the mediation process, arbitration binds the parties. And unlike the formal legal process, arbitration rulings can often not be appealed. Arbitration proceedings are also private, meaning the result is kept out of the public eye.

Texas non-compete laws are killing Austin’s chances of being the next Silicon Valley

June 20, 2017 | Adam S. Greenfield

Silicon Valley has been successful partially due to employee mobility. California forbids non-compete agreements, and it’s a fundamental policy of the state that any agreement in restraint of competition is to that extent void. There are certain exceptions, such as a person selling the goodwill of a business to a buyer who wants him or her to refrain from carrying on a similar business within a certain geographic area in which the original business has been sold.

However, most non-compete agreements that are enforceable to restrict workers in other states are void in California. Almost one in five employees in America is now subject to a non-compete clause, and many of these employees are in low-paying or blue collar jobs. For example, a well-known case involved the sandwich chain Jimmy John’s, which tried to stop its former franchisees from working for other sandwich makers. As a result, Silicon Valley employees are able to shift tech jobs relatively easily. The result has been substantial innovation.

Researchers have found that non-compete clauses in other states force workers to stay longer in one job, and they earn less than they would in a state like California, or in a country like Israel, which is also hostile to non-compete agreements. Although firms may invest more in research and development if their investment is protected by a non-compete clause, a worker who is locked into a particular company invests less in self-training, and this affects what the worker produces and creates. Ultimately, non-compete clauses chill innovation more than they help it.