Manager pointing to signature line for employee to sign

Should You Sign a Non-Compete Agreement?

Let’s say you’re presented with a non-compete agreement, and you do not want to sign it. The terms are not in your best interests. But you’re afraid that you might lose your job if you refuse to sign it. What do you do?

Answer: Call an employment law attorney. Texas laws protect you from unreasonable restrictions, but employers push it to the limit and sometimes beyond. Gardner Employment Law has analyzed hundreds of non-compete agreements, and we are more than ready to guide you.

 

Can You Be Forced to Sign a Non-Compete Agreement?

 

The basic answer is no, but of course there’s a caveat that can trigger consequences. In Texas and most states an employer can run its business as it sees fit. The Texas Supreme Court held in General Mills v. Hathaway that an employer can change the terms and conditions of an employment arrangement at any time, as long as the employee is given “unequivocal notice” of the change before it’s made. Then the employee can choose either to accept the change and stay, or reject the change and leave. Instituting a non-compete agreement qualifies as one of these changes.

Basically, employers are legally protected by the standard of “employment at will.” This means an employer can terminate an employee for any reason, or even no reason, so long as the decision-maker is not acting on an unlawful motive. Because it is perfectly lawful to change the terms of employment and institute the requirement of a non-compete, an employee can be terminated for refusing to sign the agreement. The bottom line is, you may be required to sign a non-compete agreement or face termination.

Still, there are complexities with every agreement that should be professionally analyzed. As we explain in Non-Compete Agreements, employers cannot insist on terms that are unreasonable or that would prevent you from earning a living. Because so much is at stake, you should get legal advice before signing anything.

 

Must All Employees Sign the Same Non-Compete Agreement?

 

Again, the legal answer is no. However, the company likely will tell you that the wording cannot be changed, that everyone must sign the same agreement. Legally, the non-compete agreement is a contract between you and the company. It stands on its own terms, regardless of what other employees sign. The company can change the wording if the decision-maker wants to do that.

If you contribute value to the company’s bottom line and especially if the company would have difficulty in finding a replacement, you may have leverage to negotiate better terms.

 

What If the Employer Failed to Sign the Non-Compete

 

It seems obvious that a missing signature would void a contract. Not necessarily. The legal factors surrounding this issue are murky at best. For example, in Texas a non-compete agreement must either be contained in a valid contract or it must be ancillary to an otherwise enforceable agreement. Whether signatures are required to ensure validity is based on traditional contract principles. Sometimes even an unsigned agreement still constitutes a valid contract, depending on the circumstances.

Confused? That wouldn’t be a surprise. But you don’t have to let this confusion put you in a legal bind. You can consult an expert who knows how to analyze the document and determine whether a valid contract was ever formed. In fact, putting the signature issue aside, if you’re faced with any non-compete agreement, even if it looks totally by the book, you should talk to an experienced contract lawyer before signing it.

 

Get the Employment Law Experts on Your Side

 

If you’ve read this far, chances are you’ve got a non-compete agreement sitting in front of you that you’re not sure about. It may seem like your employer holds all the cards, but that’s not necessarily true. We can help you gain the understanding you need to make decisions that are in your best interest. Contact us so we can assess your agreement and talk about your options.

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