How do you determine if a non compete/no solicitation agreement is fair for a sales position?

Asked 10 months ago - Tyler, TX

I'm looking at joining a company and they want me to sign a non compete/non solicitation agreement. The company is working in the Telecom industry and has a very specific product and go to market plan. My concern is that once I'm finished at this company, that I may not be able to get another job in the industry until the non compete runs out. I understand the companies concern. They don't want me to steal their customers for a competitor. However, their customers and potential customers contain most of the telecom industry. If I were to join another firm there is a chance I would be selling to the same customers, but the products/services would most likely be unrelated and cause no harm to the firm. Like i said, what they plan to do is pretty unique. Any Advice?

Attorney answers (3)

  1. Mark Allen Land

    Contributor Level 19

    2

    Lawyers agree

    Answered . The answer to your question requires a careful review of the proposed non-compete. The law in this area is not easy to understand.

    I realize it is difficult to justify paying a lawyer to review the agreement. If you choose not to, be prepared to abide by the terms of the agreement.

    You can attempt to negotiate the breadth (what you can or cannot do), the geographical scope, and the duration of the agreement.

  2. Lewis Andrew Lefko

    Contributor Level 7

    1

    Lawyer agrees

    1

    Answered . The company only has a protectable interest in the product that it wants you to sell to its customers. It does not have a protectable interest in unrelated products and services. The scope of the non compete should be narrowly drafted so that it does not restrict your ability to sell unrelated products and services to the company's customers.

  3. William Fulton Broemer

    Contributor Level 14

    1

    Lawyer agrees

    Answered . In Texas, an employer may make execution of a non-compete agreement a condition of (new or continued) employment. That includes temporary or seasonal employment. While being told “sign it or leave” may have felt like duress, that alone will not invalidate an otherwise enforceable non-compete agreement.

    In Texas, covenants not to compete are governed by Texas Business & Commerce Code §15.50. I have included a link to the BCC §15 below. You can skim down to §15.50 to read the statute.

    Generally, if the non-compete is directly related to the employment, restricted to the employees activities and a reasonable geographical area, and secured through valid consideration (which generally means continued employment or some sort of monetary incentive), it will be enforceable. The most recent precedent from the Texas Supreme Court on this subject is the case of Marsh USA v. Cook. I have included a link to this case below, so you can review it and see that the courts will generally enforce a non-compete agreement which meets the requirements discussed above.

    I strongly encourage anyone who is considering a non-compete arrangement to consult an experienced labor and employment attorney and go over the document item by item.

    Good luck.

    Your question has been answered as a courtesy. This is not paid legal advice. Nothing in this communication is... more

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