Employment contracts containing covenants not to compete have been the subject of many lawsuits in Texas. Texas law scrutinizes these covenants and they must be carefully drafted for Texas courts to enforce them. Often, employees can file a declaratory judgment action to modify or void covenants not to compete on the ground they are overbroad as to activity prohibited, length of time or their geographical limitations.
Additionally, employees can claim their litigation fees in a declaratory judgment action. Consequently, careful draftsmanship and timing are important considerations in preparing or evaluating disputes regarding covenants not to compete.
Given these factors and the continuing litigation in the courts of Texas regarding covenants not to compete, it may be time to update existing covenants not to compete, regardless of whether you're an employer or employee.