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Employers Must Give Adequate Consideration to Support Non-Compete Agreements

// Attorney Keith Clouse

A non-compete agreement forbids an employee from competing with an employer post-employment.  But, cautions Dallas non-compete attorney Keith Clouse, an employer must provide adequate consideration to the employee for the contract to be enforceable.

In Texas, the consideration given by an employer must give rise to the employer’s interest in restraining the employee from competing with it.  Few promises satisfy this strict standard.  An employer’s promise to provide the employee with a raise, a significant bonus, stock options, or any other form of monetary consideration is insufficient.  Instead, an employer must agree either to provide an employee with confidential business information or trade secrets or to provide the employee with specialized training.  Courts have found that a promise to give an employee either confidential information or specialized training gives rise to the employer’s interest in preventing the employee from competing with it post-employment.

Drafting non-compete agreements that are to be enforced in Texas can be challenging because the legal requirements are so strict.  Many out-of-state employers (who operate in states where monetary consideration can support a non-compete agreement) are shocked to discover that the law differs in Texas.  To speak with a Texas non-compete attorney, please contact the employment law lawyers at Clouse Dunn Khoshbin LLP at


Contact Keith Clouse


Clouse Dunn LLP

214.220.2722 214.220.3833 ( fax)