Are non-compete agreements signed in one state legally binding in another?

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Are non-compete agreements signed in one state legally binding in another?

I signed a non-compete agreement for a company in NC 4 years ago. The company is based in NC and I’m an outside sales rep based out in TX and work out of my home and cover the whole state. The agreement is based only on NC law to the best of my understanding. Before I took this job I worked for this company’s largest competitor for 2 years and since they did not ask me to sign a non-compete that was never an issue.

Asked on July 27, 2011 Texas

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Please take your agreement to an attorney to review.  When you say that it is based upon North Carolina law you mean the following:

 In general a valid non-competition agreement in North Carolina will have to:
•be in writing;
•be reasonable in scope, duration and territory;
•protect a legitimate business interest;
•be consistent with public policy
•offer the employee something in return for the employee’s promise not to compete with the employer.

However, you live in Texas and in recent years, Texas has gone from being a very anti-non compete-agreement state to a relatively pro-enforcement state.  The company would seek to enforce the agreement against you in Texas and it is my understanding that there has been relatively new case law on the subject.  So go and see an attorney.  Good luck.

 


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