By now, most business people are coming to realize that Texas courts regularly enforce non-compete agreements.
Assuming the non-compete has reasonable limits, such as to time and scope, it will likely pass muster. That being said, as a business owner, it should be considered whether the non-compete is worth it. A little over a year ago, restaurant chain Jimmy John’s came under scrutiny for requiring all employees, even entry-level sandwich makers, sign non-compete agreements. Moreover, it was reported these multi-year non-competes prohibited Jimmy John’s employees from working for any business which made 10% or more of its revenue off sandwich sales within three miles of any Jimmy John’s location.
This set off a fire storm and made national headlines – it even drew boycotts of the chain and a congressional investigation. A question to ask is: what was Jimmy John’s seeking to protect with these non-competes?
Was this just a misguided blanket inclusion in their hiring process…
With executives and other workers that are exposed to protected business information, the need for a non-compete is easy to see. For entry level workers far removed – not so much. Even if the restriction could ultimately be enforced in court, the lesson here is to use caution when placing such restrictions on all your workers – does it protect a legitimate interest of your business, and is it worth it?