Texas Man Poses Challenge to Restrictive Noncompetition Clause

Businesses have an interest in protecting themselves from former employees who might provide value to other companies in the area. There are times, though, when companies overstep their bounds in an aggressive effort to restrict employee rights. That might be what happened in Texas, where a Tyler man has claimed that he should not be bound by a restrictive noncompetition clause that he never agreed to.

The situation shows the important balance that is often struck when it comes to employee rights. Employment contracts should be designed to protect both sides. Employees will often tell people, though, that these deals end up working out much better for the powerful employer. When employers overstep their bounds, they can apply restrictive clauses that keep employees from earning a living after leaving a company. 

A Texas man was hired as the vice president of Turn-Key Services back in 2009, and during his employment, he was given a shareholder agreement that included a non-competition clause. Though he never signed the agreement, he received stock as a part of his compensation, and he is now being asked to comply with the terms of a deal he never agreed to.

Those stock options now have him in a major contract dispute, as his company is attempting to hold him to the non-competition clause since he has left the employer. While companies do have some power over their employees, they cannot sap all employee rights. Employees should seek legal advice before signing employment contracts—and, should an employer attempt to enforce a questionable contract, it may be wise to seek legal representation.

Source: The Southeast Texas Record, “Man disputes non-compete clause in former employer’s agreement,” Kelly Holleran, Aug. 26, 2013