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RE: Non-compete contracts
I have read several articles re: non-compete contracts on the internet and their validity after one was fired; however, I am still confused about the state of Texas upholding non-compete contracts. My situation is as follows:
1) Was employed August 2001
2) Received letter of employment September 10, 2001 outlining salary, responsibilities and commission
3) Signed a non-compete contract April 21, 2003 in which I excluded my largest client.
4) Was fired September 2004 for failure to take a $15,000 reduction in my base salary. Reasons given for requesting reduction were: I made too much money (more than the owner), a co-worker needed an increase in pay, and the company needed to pay for a marketing plan.
Since being fired I was unable to find a new position and decided to begin my own company effective January 1, 2005. There is one former client that I would like to contact -- one that I brought into the company from a previous position and one that the owner has never meet, spoken too or had any dealings with.
Can I contact that client in any capacity? Even to let them know why I dropped out of sight? Also, as long as I do not contact any additional clients that are my former employer's can he prevent me from operating my own business.
Answers (2)
It's no wonder the articles you've read have left you somewhat confused about the Texas law on non-compete agreements. The judges are confused too, and that can sometimes be an issue when a lawsuit is filed. Some judges get it right, some don't. And that is when appellate lawyers get to make money. That is also one of the reasons we have appellate courts -- and how those judges (and their staffs) make money. I would add only one comment to the very sound advice from Mr. Henderson -- and that is that you should weigh just how important that potential piece of business is -- and whether it's worth it to pay lawyers to litigate it for you. Now, sometimes the lawyer can negotiate with the other side and come to some compromise that recognizes your right to compete in some form or another, but you would still be somewhat limited in what you can do. Sometimes that sort of compromise may be necessary to avoid the cost of litigation. That is more of a business decision than it is legal advice, and so one that only you can make. But, get that legal advice first.
posted by Margaret A. Harris | Jan 3, 2005 1:22 PM [EST]
Your question cannot be answered simply. I strongly suggest you spend an hour with an employment attorney and go over the details. First of all, the attorney needs to look at the non-compete to assess its validity. Second, you need to be versed on the common law causes of action such as trade secrets, conversion of a company list and tortious intereference with a business contract. Once you have an undertsanding of these laws, then you can make your decision on how to proceed.
posted by Trey Henderson | Jan 3, 2005 1:10 PM [EST]
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