Dallas Employment Lawyer - Keith Clouse

Keith Clouse
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Is Your Non-Compete Ancillary to an Enforceable Agreement?

Texas law requires that a covenant not to compete be ancillary to or part of an otherwise enforceable agreement at the time the agreement is made.

July 03, 2015


(press release: cdklawyers) // Dallas, Texas, United States // Keith Clouse

Dallas non-compete lawyer Keith Clouse represents employers in non-compete litigation matters and assists them with drafting non-compete agreements. He notes that these agreements are highly technical and require adhesion to statutory requirements. Today, he highlights a recent Fifth Circuit Court of Appeals opinion that reinforces the requirement that all non-compete agreements be “ancillary to an otherwise enforceable agreement.” Hunn v. Dan Wilson Homes, Inc., No. 13-11297 (5th Cir. June 15, 2015), available at http://www.ca5.uscourts.gov/opinions/pub/13/13-11297-CV0.pdf.

Texas law requires that a covenant not to compete be ancillary to or part of an otherwise enforceable agreement at the time the agreement is made. This requirement is satisfied when the covenant is ancillary to or part of an agreement that contains mutual, nonillusory promises; a stand-alone promise from an employee is insufficient. In at-will employment situations, the requirement may be met if mutual promises are made. For example, the requirement may be met if an employer promises to provide an employee with confidential information and the employee promises not to disclose that confidential information. In some cases, an implied promise may be found if an employee’s express promise not to disclose confidential information necessarily involved the provision of that information by an employer. Non-compete law changes rapidly, however, and an employer would be wise to consult an employment law attorney before entering into any non-compete agreements.

This article is presented by the Dallas employment attorneys at Clouse Dunn LLP. To speak to an employment law attorney, send an email to debra@clousedunn.com or call (214) 239-2705.