How a Mental Health Care Business Hired a Lawyer to Draft an Employee Confidentiality Agreement in Texas

Given the recent legal developments around non-competes, here's exactly where things stand for your situation: Where Things Stand: The FTC Ban Isn’t Active The Federal Trade Commission did try to ban most non-compete agreements across the country, but that rule was blocked by a federal court in Texas on August 20, 2024. The ruling included a nationwide injunction, which means the FTC can't enforce the rule at this time. They’ve already appealed, but for now, nothing has changed legally. So, we’re still in a state-by-state landscape when it comes to whether your non-compete is actually enforceable. So Can Your Employer Enforce It? That depends on where you live and the details of your agreement. Courts usually look at whether the restrictions are reasonable, and they focus on three main areas: 1. Timeframe: Most courts consider anything from six months to two years fair, depending on your role and industry. Anything longer tends to raise red flags. 2. Location: The restriction has to make sense based on where your employer actually does business. If it tries to block you from working anywhere in the country, but your employer only operates regionally, that could be a problem for them. 3. What You’re Being Blocked From Doing: The agreement has to be targeted. It should protect real business interests like client relationships, proprietary methods, or sensitive information. It can’t just exist to shut you out of the market. Why Your State Matters The enforceability of non-competes can vary a lot depending on where you are. A few states have almost completely banned them—California, North Dakota, and Oklahoma, for example. Others still allow them but have been tightening the rules, especially for lower-income employees. Many have added salary thresholds or narrowed which industries can use them at all. What Happens If You Break It? If your non-compete is enforceable and you go against it, your former employer might: • Ask the court to stop you from working at your new job immediately • Sue for money if they can prove you caused financial harm • Make you pay legal fees, depending on what your contract says Even if the clause wouldn't hold up in court, it can still create problems. Just the threat of legal action can be expensive and stressful. Plus, some potential employers may steer clear of hiring someone with a non-compete, even if it’s questionable. What You Should Do Next • Read your agreement closely. Pay attention to how long it lasts, where it applies, and what it actually prohibits. • Look up your state’s laws. That’s the key to figuring out whether the agreement holds water. • Talk to an employment attorney. A short consultation can give you clarity and protect you from missteps. • Think about your new role. If the new job is different enough or doesn’t involve the same clients or confidential information, that can help your case. So, yes, the national situation is in flux, but the practical reality is that non-compete law is still very much a state-by-state issue. Don't assume you’re stuck, but don't make any moves without legal advice either. Since every non-compete is different, it can really help to have a lawyer review yours and explain what it means. Attorneys here on Contracts Counsel would be happy to help.

Agreements often have clauses that survive termination. It would be hard to advise you without seeing the contract. How broad/reasonable the clause is, is there a liquidated damages clause, are they asking for equitable relief, etc. And of course, all these likely involve litigation. And also what is information is confidential as it relates to your new business