What invalidates a non-compete agreement?

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What invalidates a non-compete agreement?

I was getting paid 100% commission and my commission pay was cut by 80%. I could no longer live on 20% pay. I quit. Is this constructive discharge? Is the non-compete still valid? Also, I signed a first non-compete 2 years after starting work, then another 1 1/2 years after I signed the first, however I given nothing in exchange for signing them. Was there proper consideration? Finally, is my old non-compete enforceable if my former employer gave me an ultimatum to sign a new non-compete in order to continue employment? Should I speak with an employment law attorney? In Houston, TX.

Asked on June 5, 2011 under Employment Labor Law, Texas

Answers:

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

Answered 10 years ago | Contributor

You have a few different issues going on here.  Let's deal with them one at a time. First, it is my understanding that while Texas courts have been historically reluctant to enforce non-competition agreements, the Texas legislature has enacted the Covenants Not to Compete Act (the “Act”), specifically making such agreements enforceable provided there is compliance with all of the provisions of the Act.  Soemployers seeking to prevent employees from competing after their termination must carefully draft non-competition agreements to fit within the limited perimeters established by the legislature.  Now, as to the constructive discharge issue, you may have a valid case.  But really all the agreements that you signed - the non-compete, any employment agreement on the commissions and how they are computed - need to be read.  So yes, go and seek legal help.  Good luck.


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