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The White House Speaks On Non-Compete Agreements

“Non-competes are often given to workers that do not possess trade secrets”

July 18, 2016

(press release: cdklawyers) // Dallas, Texas // Keith Clouse

On May 5, 2016, the White House issued a report on non-compete agreements.  Employers provide non-competes to protect their trade secrets and confidential information.  However, the US Treasury Department found that non-competes are often given to workers that do not possess trade secrets.  When used appropriately, non-competes can play an important role in protecting a business, but in some cases, they impose substantial costs to workers and hinder the economy.

The White House has presented seven (7) potential issues with non-competes:

         1.    Workers who are unlikely to possess trade secrets are nonetheless compelled to sign non-competes;

         2.    Workers are asked to sign non-competes only after accepting a job offer, when they have already declined other offers and thus have less leverage to bargain;

         3.    Non-competes, their implications, and their enforceability are often unclear to workers;

         4.    Employers often write non-compete agreements that are overly broad or unenforceable;

         5.    Employers requiring non-competes often do not provide “consideration” that is above and beyond continued employment;

         6.    In some cases, non-competes can prevent workers from finding new employment even after being fired without cause; and

         7.    In some sectors, non-competes can have a detrimental effect on health and well-being by restricting consumer choice.

These issues can and should be avoided.  Texas employers should take steps to address these potential issues, which may increase an employer’s ability to enforce a non-compete agreement.

To speak to an employment law attorney about non-compete agreements, send an email to debra@clousedunn.com or call (214) 239-2705. This article is presented by the Dallas employment law lawyers at Clouse Dunn LLP.