I have been asked to sign a non-compete non-disclosure agreement by my employer. The problem is that its very restricting

You should consult in person with a Texas employment lawyer to get a careful evaluation of your situation. However, I can share with you that many states disfavor non-competition agreements because they keep people from working. A long non-competition agreement related to the sale of a business is typical and ususally enforcable. However, a non-competition agreement that simply keeps an individual employee from working in his chosen field is less likely to be enforcable. To be enforcable, the non-competition provision must protect a legitimate company interest. The classic example is an outside sales person, who is often the face of the company with the company's customers. If that employee leaves to work for a competitor, he would likely take with him the company's "good will" with its customers. The employee has built a relationship with the company's customers, and it would be unfair for the employee to use those relationships to beneift a competitor. Consequently, if the employee wants to leave, it would be reasonable to give the company some reasonable period of time to hire a new sales person and allow that new person to build a relationship with the company's customers. However, once the company's good will with its customers has been effectively transferred to the new sales person, then there is no longer any reason to keep the old sales person from working in his chosen field. Even when a non-competition provision is in place to protect a legitimate company interest, it must be narrowly drafted with regard to its duration and geographic scope, as well as the activities that it prohibits. In other words, the restrictions on the individual must be as small as possible. Unfortunately, many non-competition provisions are not in place to protect some legitimate company interest. Rather, they are merely in place to thwart honest competition--which frankly is bad public policy, a terrible burden on the affected individuals, and contrary to the values of our free enterprise system. In addition, many non-competition provisions are far too broad in terms of duration and geographic scope. (Again, non-comepetition provisions related to the sale of a business are a different story.) I believe that many companies require individuals to sign non-competitiion provisions that they know are unenforcable--but they do it anyway because they also know that the individual may not be able to say "no" when being hired, and may not have the ability to challenge enforcement at the end of employment. I've actually seen individuals who were forced to move their families and start life over in a new part of the country because of a non-competition provision that was probably unenforcable to begin with, but the individual couldn't afford to fight it and couldn't afford to put his family's well being at risk. Fortunately, some states have laws that make non-competition provisions automatically unenforcable, but with a few exceptions. I wish that more states had a similar law. With all of that said, I would not be surprised if your non-competition provision is unenforcable. However, you really should consult with a Texas lawyer who is familiar with this area of the law. Good luck.

Mr. Jackson's response is spot on, but your question raises an interesting point. These types or cases are very fact specific. Do you already have a non-compete in place, or is your employer having you sign a non-compete after you are already been employed? In Texas, a non-compete agreement is a contract that must be ancillary to or part of an otherwise separate and enforceable agreement. These agreements are governed by the Texas Business & Commerce Code §15.50 and Texas case law interpreting same. Courts generally only like to enforce non-compete agreements that are reasonably limited in time, scope and geography. In theory, the employee should prevail most of the time in limiting the terms of a non-compete agreement, or getting a finding that it is unenforceable if it doesn’t have an enforceable modification clause, because most non-compete agreements are not reasonably limited in time, scope and geography. However, in my experience and as a practical matter, the ultimate issue is not whether the non-compete agreement is really overly broad and thus unenforceable, or subject to reasonable restrictions or modifications, but rather, can the employee continue to fight with the 800 pound gorilla through final resolution in the court system. These types of legal proceedings can get very expensive very fast and may involve multiple hearings (e.g., a lengthy temporary restraining order hearing, a long permanent injunction hearing, discovery hearings, etc.), and the case fees and expenses usually financially break the employee. I have represented the employer and employee in non-compete disputes in the past. In my personal experience, the employer wins simply because the employee cannot afford to keep up the fight. Your question poses additional considerations regarding the issue of potential misuse or misappropriation of technology and/or patent(s) developed during your tenure at your current employment which, regardless of whether they are actually subsequently infringed upon, could result in additional claims by your employer asserted against you for damages if a lawsuit resulted. In one non-compete case I was involved in with additional claims for damages against the employee, despite the employee winning at the TRO hearing, the employee had to file for bankruptcy protection because of the legal fees and potential exposure, without ever getting to the actual merits of the ultimate claims.

Most companies will negotiate their non-competes to make them practical, especially if you are someone they really want to hire. You can try to get it down to one year and limit it to a very specific task or instrumentation (such as phones that use a particular technology). Be sure to leave yourself room to find a new job, though. If the employer will not negotiate the non-compete, but you really need the job, then accept the job and sign the agreement. Although there are nightmare scenarios abound, the vast majority of non-competes don't get attention, especially after the first few months of separation. Quite simply, everyone gets busy with everything else and you fall through the cracks. You could always hire an attorney help craft some acceptable language.

All previous answers provided to your question are accurate. Based on the question I assume that you do not already have a noncompete in place. If you signed, went to a competitor, and then suit was filed, the Court would examine whether the consideration provided to you to sign the noncompete gave rise to enforce the employer's legitimate business interest. The Texas Supreme Court has muddied the waters in this area over the past few years. Before last year, the employer was required to give the employee consideration other than money (e.g. confidential information/specialized training) that gives rise to the employer’s legitimate business interest in restraining the employee from competing (e.g. customers, business goodwill). Last year the Texas Supreme Court held in Marsh v. Cook that stock options could serve as the basis for a noncompete agreement and that the traditional method of providing confidential information was no longer the exclusive method for forming an enforceable noncompete. The Marsh case does not say that an employer can or cannot provide the employee money not to compete. The Marsh case enforced a noncompete supported by stock options, but it is unclear how far this line of reasoning extends, and no subsequent cases have dealt with the issue. An additional hurdle is that your employer is providing the consideration mid-employment rather than pre-employment. The statute says that the consideration provided must be “ancillary to an otherwise enforceable agreement,” but does not limit the application to agreements signed at the beginning of employment. Unfortunately, Texas courts do not provide a clear picture as to how this issue would be decided either. I would strongly encourage you to consult with an attorney before signing this agreement.

Frequently, under Texas law, the contract provisions which the employer "requires" the employee to sign are overly broad and unenforceable as to the employee activities restricted, the timescope of the restriction and/or the geographical scope of the restriction. Further, the provisions in such a contract can be challenged as not being supported by independent consideration. I would need to see the precise language involved and to discuss the circumstances involved in order to know enough to respond further to this inquiry and to determine whether and what legal advice I might give this potential client.