Non-Compete Agreements and Social Media
Unsurprisingly, this is a nuanced issue with many fact-dependent potential outcomes. The Texas Supreme Court has held that restrictions preventing employees from soliciting any of the employer’s customers worldwide, including those with whom she had no dealings during her employment, are not reasonably necessary to protect the employer’s business interest of preventing the employee from taking her clients with her to a competitor.
Even if the employee makes every attempt to avoid actively using the former employer’s confidential information, Texas courts acknowledge the extreme difficulty former employees face in not indirectly applying some of that confidential knowledge in her position with the new employer.
The employee would have to establish enough evidence that she can go into competition in the same market and not use the information she acquired with the former employer to rebut the presumption that the employer suffers irreparable injury from a highly trained employee’s continued breach of a noncompete agreement.
What About Independent Contractors and Non-Compete Agreements?
A major benefit to a worker’s status as an independent contractor is the freedom that comes with that classification, so workers may be surprised to learn that they can be restricted from competing with a business they work for as if they were an employee. Thus, an agreement that is enforceable against an employee is enforceable against an independent contractor as well.
What is the "Blue Pencil Rule"?
In fact, the Texas Business & Commercial Code actually requires courts to reform restrictions if reformation is necessary to make the restrictions enforceable. However, employers are penalized if reformation is necessary, as the Act prohibits the employer from recovering its actual damages, at least until reformation occurs.
The Act also provides that an employee may recover reasonable attorney’s fees in defending against a restrictive covenant if (1) the employee establishes the employer knew at the time the agreement was executed that the agreement was overly broad and (2) the employer seeks to enforce the agreement to a greater extent than is necessary to protect its goodwill or business interest.
Defenses Against Non-Compete Agreements in Texas
Are you facing difficulties due to a previous non-compete agreement?