EMPLOYEE NON-COMPETE AGREEMENT

(Texas – Draft Template)

[// GUIDANCE: This template is designed to comply with the Texas Covenants Not to Compete Act, Tex. Bus. & Com. Code §§ 15.50–15.52. All bracketed fields MUST be customized before use. Modify scope, duration, and geographic limits to fit the specific employee’s role and legitimate business interests.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

This Employee Non-Compete Agreement (this “Agreement”) is entered into and effective as of [Effective Date] (the “Effective Date”) by and between:

1. [Employer Legal Name], a [State] [entity type] having its principal place of business at [Address] (“Employer”); and
2. [Employee Full Legal Name], residing at [Address] (“Employee”).

A. Recitals

A.1 Employer is engaged in the business of [Describe Business] (the “Business”).

A.2 Employer will provide Employee with access to Confidential Information (as defined below), specialized training, and an employment relationship, each of which the parties intend to constitute adequate, contemporaneous, and independent consideration supporting the restrictive covenants contained herein in accordance with Tex. Bus. & Com. Code § 15.50(a).

A.3 Employer desires to protect its legitimate business interests, including its goodwill, customer relationships, Confidential Information, and Trade Secrets, through reasonable post-employment restrictive covenants.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

II. DEFINITIONS

For purposes of this Agreement, the following capitalized terms have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.

“Affiliate” – any entity controlling, controlled by, or under common control with Employer.

“Business” – the line(s) of business in which Employer or its Affiliates are engaged during Employee’s employment and upon termination, including [specify].

“Confidential Information” – information (whether in oral, written, electronic, or other form) that is proprietary to Employer or its Affiliates, not generally known to the public, and that Employer treats as confidential, including Trade Secrets, customer data, pricing, marketing plans, software, and inventions.

“Competing Business” – any business that engages in, or plans to engage in, activities that are the same as or substantially similar to the Business within the Geographic Area.

“Customer” – any person or entity to whom Employer has sold products or provided services at any time during the 12 months preceding the Termination Date, or to whom Employee, directly or indirectly, marketed, sold, or provided services on Employer’s behalf during that period.

“Geographic Area” – [Describe Territory e.g., Texas Counties of A, B & C; or within a 50-mile radius of Employer’s principal office; or any state in which Employee regularly performed Services].
[// GUIDANCE: Texas courts strictly scrutinize geographic scope; tailor to the actual territory Employee serviced.]

“Restricted Period” – the period commencing on the Termination Date and continuing for [__] months.
[// GUIDANCE: One to two years is customarily deemed reasonable under Texas law.]

“Services” – the duties Employee performs for Employer, including [list key functions].

“Termination Date” – the date Employee’s employment with Employer terminates for any reason.

“Trade Secrets” – all information qualifying as a “trade secret” under the Texas Uniform Trade Secrets Act, Tex. Civ. Prac. & Rem. Code § 134A.002(6).

III. OPERATIVE PROVISIONS

3.1 Employment Status

(a) At-Will Relationship. Employee acknowledges that employment is at-will and may be terminated at any time by either party, with or without cause, subject only to any notice requirements contained in Employer’s policies.
(b) No Modification. Nothing in this Agreement alters the at-will nature of employment unless an executed, written agreement expressly provides otherwise.

3.2 Consideration

Employer’s promises to (i) provide Employee with Confidential Information and Trade Secrets, (ii) furnish specialized training, and (iii) employ Employee on an at-will basis constitute independent, adequate, and mutually agreed consideration for Employee’s covenants herein.

3.3 Condition Precedent

Delivery of Confidential Information is conditioned upon Employee’s execution of this Agreement.

IV. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each party represents that it has full power and authority to enter into and perform this Agreement and that doing so does not violate any other agreement.

4.2 Employee Representations. Employee represents and warrants that:
(a) Employee is not currently a party to any agreement or restrictive covenant that would conflict with or be violated by Employee’s performance under this Agreement; and
(b) Employee shall promptly disclose to Employer any potential conflict that may arise.

4.3 Survival. The representations and warranties in this Article IV shall survive termination of employment to the extent necessary to enforce this Agreement.

V. COVENANTS & RESTRICTIONS

5.1 Covenant Not to Compete

(a) Non-Compete. During employment and throughout the Restricted Period, Employee shall not, directly or indirectly, within the Geographic Area, own, manage, operate, control, be employed by, consult for, assist, invest in, or otherwise engage in any Competing Business with respect to activities identical or substantially similar to the Services.

(b) Geographic Reasonableness. The parties agree that the Geographic Area is narrowly tailored to protect Employer’s legitimate business interests, is no broader than the area in which Employee performed Services, and therefore complies with Tex. Bus. & Com. Code § 15.50(a).

(c) Reformation. If a court of competent jurisdiction determines that any restriction in this Article V is overbroad, the parties intend that the court reform the restriction to the maximum extent permissible under Tex. Bus. & Com. Code § 15.51(c), and enforce the covenant as reformed.

5.2 Non-Solicitation of Customers

During employment and for the Restricted Period, Employee shall not, for the benefit of a Competing Business, solicit or attempt to solicit any Customer with whom Employee had Material Contact during the 12 months preceding the Termination Date.

5.3 Non-Solicitation of Employees

Employee shall not, during employment and for [__] months thereafter, induce or attempt to induce any employee of Employer to leave employment or to accept employment with a Competing Business.

5.4 Confidentiality

Employee shall, both during and after employment, hold all Confidential Information in strict confidence and not disclose or use it except as authorized by Employer.

5.5 Return of Property

Within 48 hours of the Termination Date, Employee shall return to Employer all property, documents, and electronically stored information containing Confidential Information.

VI. DEFAULT & REMEDIES

6.1 Events of Default

(a) Employee Default. Any breach of Article V constitutes a default.
(b) Employer Default. Failure to fulfill consideration obligations under Section 3.2, after written notice and a 10-day opportunity to cure, constitutes a default.

6.2 Notice & Cure

The non-defaulting party shall give the defaulting party written notice of default specifying the nature of the breach. If the breach is curable, the defaulting party shall have 10 days to cure.

6.3 Injunctive Relief

Employee acknowledges that a breach of Article V will cause irreparable harm for which monetary damages are inadequate. Employer shall therefore be entitled to temporary, preliminary, and permanent injunctive relief, specific performance, or other equitable remedies without the necessity of posting bond or proving actual damages, in addition to any other remedies at law.

6.4 Damages & Fees

In the event of Employee’s breach, Employee shall be liable for:
(a) all actual damages incurred by Employer, including lost profits; and
(b) reasonable attorney’s fees and court costs incurred in enforcing this Agreement.

[// GUIDANCE: Attorney-fee shifting is permitted in Texas if expressly provided by contract.]

VII. RISK ALLOCATION

7.1 Indemnification by Employee

Employee shall indemnify, defend, and hold Employer and its Affiliates harmless from any losses, liabilities, damages, costs, or expenses (including reasonable attorney’s fees) arising out of or relating to Employee’s breach of this Agreement.

7.2 Limitation of Liability

No contractual liability cap applies to Employee’s breach of Article V or to the indemnity provided in Section 7.1.

7.3 Force Majeure

Neither party shall be liable for failure to perform if such failure results from an event beyond its reasonable control that renders performance impossible or illegal; provided that this Section does not excuse payment or confidentiality obligations.

VIII. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Texas, without regard to conflict-of-law principles.

8.2 Forum Selection

Subject to Section 8.3, the parties irrevocably submit to the exclusive jurisdiction of the state courts located in [County], Texas, and waive any objection to venue therein.

8.3 Arbitration (Optional)

[OPTION A – OMIT if arbitration not desired]
Any claim or controversy arising out of or relating to this Agreement shall be resolved by binding arbitration administered by [Administrator] in accordance with its employment arbitration rules. The arbitration shall take place in [City, Texas]. Judgment on the award may be entered in any court of competent jurisdiction.
[// GUIDANCE: Insert only if Employer elects arbitration. Ensure arbitration clause survives injunctive relief carve-out.]

8.4 Jury Waiver (Optional)

[OPTION B – OMIT if not desired]
EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

8.5 Equitable Relief Preservation

Notwithstanding Section 8.3, Employer may seek equitable relief in a court of competent jurisdiction to enforce Article V pending arbitration.

IX. GENERAL PROVISIONS

9.1 Amendment & Waiver. No modification of this Agreement is effective unless in a writing signed by both parties. No waiver of any breach constitutes a waiver of any subsequent breach.

9.2 Assignment. Employer may assign this Agreement to any successor in interest to the Business. Employee may not assign or delegate any rights or obligations without Employer’s prior written consent.

9.3 Successors & Assigns. This Agreement shall bind and inure to the benefit of the parties and their respective successors, assigns, heirs, and legal representatives.

9.4 Severability & Reformation. If any provision is held invalid or unenforceable, such provision shall be reformed to the minimum extent necessary to render it enforceable, and the remaining provisions shall remain in full force and effect.

9.5 Entire Agreement. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements, understandings, or representations, whether oral or written.

9.6 Counterparts & Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures delivered electronically or by facsimile are deemed original signatures for all purposes.

9.7 Headings. Section headings are for convenience only and do not affect interpretation.

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

[Optional Notary Acknowledgment block per Texas Civil Practice-and-Remedies Code if notarization is desired.]

[// GUIDANCE:
1. Prior to issuance, confirm that the duration, geographic scope, and scope of restricted activities are narrowly tailored to Employee’s actual duties; overbreadth endangers enforceability.
2. Confirm that Confidential Information and/or specialized training will be provided at or shortly after execution to satisfy Texas “ancillary” requirement.
3. Retain signed copies in personnel file and provide employee a duplicate original.
4. Consider providing a separate, standalone confidentiality agreement for broader protection.
]