If I’ve been laid off, what are my rights regarding an non-compete agreement that I signed?

I have a job opportunity with a competitor, but signed an agreement not to compete. Can it be enforced? What are my options?

Asked on December 17, 2015 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The "consideration"--or thing of value--which you generally get when signing a non-compete is continued employment; if you are laid off or terminated, there is now no longer any consideration for your agreement, and it cannot be enforced against you. (The law does not let the employer terminate you while also preventing you from working elsewhere.) So as a general matter, you can pursue the opportunity.
The exception would be if you received some separate payment or assets (e.g. a bonus; stock or stock options; etc.) to sign the agreement--something  over and above employment. If you did, then because you received an independent benefit, the agreement is still enforceable.


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