Party Crasher: Non-Competes

Jamshyd (Jim) M. Zadeh, JD

What is non-compete?

Non-compete is different from a:

Non-solicitation agreement Non-disparagement agreement

1. Reasonable as to Scope, Geography, Time

2. Ancillary to otherwise enforceable agreement

Look at the state non-compete act

• None – CA, ND, OK

• Many states have limitations on “professionals”, physicians, broadcasters.

• Attorneys and financial services industry outside of these laws.

• Split on whether continued employment is enough consideration.

• Judicial modification (blue pencil) usually allowed.

• Many states undecided if unenforceable if employee is terminated without cause.

Non-competes for low wage and operational workers? – 27% go to earners under $40k

Used for warehouse workers, sandwich makers and dog walkers

Non-Compete Agreements in TX before 1989

Non-competes in Texas from 1989-mid-2000s

Non-competes in Texas now

Non-Compete realities

Cease and Desist is sometimes all that is done.

Employees have no $.

Employers just want it to stop.

TRO and TI practice is expensive.

Is this a case where you must set an example?

Does employer have clean hands?

What if you successfully enforce?

What if you fail?

New employee silver bullet in Texas?

Freedom to Compete Act - Probably Not.

Non-compete tips

• Go over your non-compete regularly

• Properly limit as to scope, geography and time

• What state’s law applies?

• Consult a lawyer (Julie and Julia).

• Tolling agreement

• Follow on LinkedIn or hire Mike Coffey.

• Please do not use a non-compete for everyone

Any questions or comments?

jim@zadehfirm.com

www.zlawz.com

817-335-5100

Jamshyd (Jim) M. Zadeh

Law Office of Jim Zadeh, P.C.1555 Rio Grande Avenue

Fort Worth, TX 76102

817-335-5100

jim@zadehfirm.com

www.zadehfirm.com