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Can Continued Employment Be Sufficient Consideration For A Non-Compete Agreement

In addition to the question of whether and how they can ask existing staff to sign non-compete agreements, you should be aware of the many other considerations on the application of a non-compete agreement. The majority of states allow employment to be maintained in return for a non-compete agreement. However, some additional consideration is needed in at least twelve Member States. And in at least six other states, the law on the need for further reflection is unclear. If the agreement is not sufficiently considered in exchange for a worker`s agreement not to face competition, a court may find that the agreement is not enforceable. The company would then not be able to go to court to obtain an injunction or other injunction to stop competition in violation of the agreement. In many countries, such as New York, employment or retention are considered sufficient. Specifically, when a non-compete agreement is signed for the hiring, the fact that the worker obtains a new job is considered a sufficient consideration for the worker who gives up his right to compete after the termination of that employment relationship. If the type of work requires an employer to share confidential information such as trade secrets with a new employee, the bar is even lower than that set by Sheshunoff.

In this scenario, an employer would not even have to promise that it would provide confidential information. The Texas Supreme Court considers the idea that the employee`s agreement not to disclose confidential material is considered presumed. See Mann Frankfort Stein – Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 850 (Tex. 2009). The Tribunal rendered a summary judgment in Horner`s favour and found that the non-competitive provisions of the agreement were unenforceable for lack of consideration. The Court of Appeal agreed and, in particular, rejected LCP`s argument that continued employment alone envisaged due consideration of the no-competition agreement. Strange as it may seem, there may be a reflection before an employee receives confidential information as long as an employer decides to do so. For example, if an employer promises to provide specific training to a worker a few months after hiring, the non-compete clause could be signed when the worker is hired, but will still not be applicable before the training begins. See Sheshunoff, 209 S.W.3d to 651.

Agreements that promise to continue working automatically complete the applicability test. However, employment plans do not automatically meet the “otherwise enforceable” standard. On the contrary, the Texas Supreme Court has ruled that “if not enforceable agreements under Section 15.50 (a) may come from employment at will as long as the consideration of a promise is not illusory.” Alex Sheshunoff Management Services, L.P. Johnson, 209 S.W.3d 644, 648 (Tex. 2006) (citing Light v. Centel Cellular Co., 883 S.W.2d 642, 645 (Tex. 1994)). The court dismissed Tech Electronic`s application because it dealt with non-competition clauses and found that “the offer of authorization or continued employment under Missouri contract law is simply not a source of consideration.” 2016 WL 6696070, at 5 (E.D.

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