Non-compete as part of termination/severance agreement

I was a Vice President at a small company and was recently terminated from my position (not for cause...part of a business restructuring). The company is paying me severance, but in order to receive the severance I had to sign a separation and release agreement which included a non-compete provision.

My questions:

Is there any legal option for me that would make the company not be able to enforce the a non-compete clause if I were to agree to release the company from the severance payments?

I have read about non-compete agreements being unenforceable if they are too broad. My agreement covers any business that competes with my old company in any place in the world for 1 year. Is that too broad to enforce?

2 answers  |  asked Oct 31, 2008 4:17 PM [EST]  |  applies to Texas

Answers (2)

Christopher McKinney
NonCompete Agreement

The short answer to your questions is "possibly". If I understand the timing of your fact scenario properly, it is possible that the noncompete at issue is not enforceable. In order to get a legal opinion as to this issue however, you will need to sit down with a lawyer and go over the facts and the contract in detail. Noncompete law is very fact-specific and it simply is not possible to give a generalized opinion with any credibility. I suggest that you sit down with a lawyer that is board certified in employment law.

If you want some additional general info on noncompete agreements, you can visit my blog here: .

Take care.

Christopher McKinney
The McKinney Law Firm
Plaza at Concord Park - Second Floor
700 East Sonterra Blvd. Suite 1221
San Antonio Texas 78258
(210) 832-0932
(210) 568-4101 Fax

posted by Christopher McKinney  |  Nov 3, 2008 09:41 AM [EST]
Dana LeJune
No, and Probably

Once you signed the agreement, and accepted the money, you are bound to comply; paying the money back won't work, as the company will hold you to it.

Yes, the scope of the agreement you describe sounds far too broad to be enforced. However, it probably has a clause that allows the court to reform (rewrite) the agreement so that it becomes enforceable. A court will probably circumscribe the boundary or term or both to be a "reasonable restraint on trade." If your new job is further than about 75 - 100 miles of where you worked for the previous employer, this may work for you, but you won't know until you work there, get sued, and get before the judge.
If you want me to look at the agreement and give you a better idea of how this may shake down, I bill at $300/hour, minimun 2 hours to review and advise.

Dana Andrew LeJune
Board-Certified, Civil Trial Lawyer
3006 Brazos
Houston, Texas 77006
"Zealous Representation"

posted by Dana LeJune  |  Oct 31, 2008 4:37 PM [EST]

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