Are All Texas Employment Contracts Enforceable?

When an employee begins work for a new employer, it is likely the employee will be asked to sign an employment agreement. A Texas employment contract acts as a guide to inform both the employee and employer of the other’s rights and obligations. Typically, an employment contract will include the terms of employment and the expectations of each party, as well as the available remedies if either party breaches the contract.

If an employee does not critically examine his or her agreement until after a problem arises, the employee may find themselves in a position where they are bound by what seems to be an unfair contract. For example, it may be that an employee discovers they are required to submit their claim through the arbitration process rather than pursue a claim in a court of law. Thus, the question often arises as to whether a Texas employment contract is enforceable.

Generally, Texas employment contracts are enforceable so long as they comply with the rules of contract formation. Simply stated, this means that a contract must be based on a mutuality of consent, involve the exchange of mutual consideration, and cannot be based on illegal activity. In addition, a contract is only valid if the parties have the mental and legal capacity to enter into the contract. However, even a contract that was validly formed can be deemed unenforceable by a court if the contract is unfair or one-sided.

Substantive Unconscionability

Texas court will refuse to enforce a contract if it is found to be unconscionable. There are two types of unconscionability: procedural and substantive. Procedural unconscionability deals with the formation of the contract, whereas substantive unconscionability deals with the terms contained in the contract. If a Texas employment contract is determined to be unconscionable by a court, the court is usually referring to substantive unconscionability.

There are several factors a court will consider when determining whether a contract is substantively unconscionable, including:

  • whether the contract prohibits a right provided by statute;
  • whether there is a lack of mutuality,
  • whether the contract is overly harsh or unfairly one-sided; and
  • whether the terms of the contract allow for sufficient time for a claim to be brought and developed.

There are many factors a court may consider when assessing the validity of a Texas employment contract. Anyone who has a question regarding the enforceability of their employment contract should consult with a dedicated Texas employment attorney.

Are You in Need of a Dallas Employment Lawyer?

If you are wondering if the employment contract you signed is enforceable, or if your employer has violated the contract, contact the the law firm of Rob Wiley, P.C. To learn more about how we can help you with the situation you are currently facing, call 214-528-6500 to schedule an initial consultation.

More Blog Posts:

Can a Texas Employer Require Employees to Pool Tips?, Dallas Employment Lawyer Blog, October 25, 2018.

Responsibilities of Texas Employers under the Americans with Disabilities Act, Dallas Employment Lawyer Blog, November 2, 2018.

Contact Information