Articles Posted in Noncompete Agreements

rasha-zeyadehPerhaps you resigned or were terminated or laid-off. On the other hand, you may have sued your employer for discrimination or some other sort of unlawful action. Either way, one of those events caused your employer to offer you a settlement or severance agreement. In exchange for signing the agreement, you will receive a payment, but also give up your right to pursue legal action against your employer, among other things.

If you are presented with a settlement or severance agreement, it is imperative that you read the agreement carefully and, if possible, get advice from an experienced Dallas Employment Lawyer. Typically, you will be allotted 21 days to review and sign the agreement, which provides you ample time to consult with an attorney. Oftentimes, companies sneak many clauses in the agreement that may come back to haunt you. Hence, consulting with an experienced employment lawyer is important.

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When a Texas employment issue arises, there are several methods by which it can be resolved. Traditionally, the aggrieved employee would file a lawsuit in a court of law with the intention that a judge or jury would ultimately resolve her or his claim.

However, over the years, alternate means of settling claims have become more and more popular. For example, in a recent blog post, we discussed how mediation may be a good way for an employee to resolve an employment claim. This is because the mediation process involves a trained expert helping the parties come to a mutually acceptable solution to the issue. If the parties cannot come to a final agreement, then neither is bound by what occurred during the mediation or by any recommendations of the mediator.

Another form of Texas employment dispute resolution is called arbitration. Arbitration is much less favorable for Texas employees. The process involves a private, non-judicial decision-maker, called an arbitrator, who hears a case and issues a decision. Unlike the mediation process, arbitration binds the parties. And unlike the formal legal process, arbitration rulings can often not be appealed. Arbitration proceedings are also private, meaning the result is kept out of the public eye.

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Silicon Valley has been successful partially due to employee mobility. California forbids non-compete agreements, and it’s a fundamental policy of the state that any agreement in restraint of competition is to that extent void. There are certain exceptions, such as a person selling the goodwill of a business to a buyer who wants him or her to refrain from carrying on a similar business within a certain geographic area in which the original business has been sold.

However, most non-compete agreements that are enforceable to restrict workers in other states are void in California. Almost one in five employees in America is now subject to a non-compete clause, and many of these employees are in low-paying or blue collar jobs. For example, a well-known case involved the sandwich chain Jimmy John’s, which tried to stop its former franchisees from working for other sandwich makers. As a result, Silicon Valley employees are able to shift tech jobs relatively easily. The result has been substantial innovation.

Researchers have found that non-compete clauses in other states force workers to stay longer in one job, and they earn less than they would in a state like California, or in a country like Israel, which is also hostile to non-compete agreements. Although firms may invest more in research and development if their investment is protected by a non-compete clause, a worker who is locked into a particular company invests less in self-training, and this affects what the worker produces and creates. Ultimately, non-compete clauses chill innovation more than they help it.

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