Remember to always invest in yourself first. In my case that means staying up to date on transaction law changes, and stay up on the myriad ways to handle business disputes. By “business disputes” I mean any number of methods to address problems business clients encounter from warranty claims, debt collection, intellectual property, employment issues, financial issues, etc., etc. One of the most common is debt collection. A client or customer that accepts your goods and services, and then fails to pay, robs of that amount of profit. Plain and simple, that is a big deal.

As a debt collection attorney, I continue to provide debt collection experience to my business clients as I have for more than 35 years.  I approach your business debt collection issue as if it was my problem, and I’m operating in your industry. I have collection programs to handle all aspects of debt collection from fresh debts, with or without the benefit of a lien, lawsuit prospects to less attractive lawsuit debtors, litigation, and judgment enforcement. I individualize our work plan and provide our clients with practical and impressive recoveries. I do advanced skip trace and asset location work in almost all cases, as debt collection work is not done until the debt is collected; meaning, in many cases, assets have to be located so debtors voluntarily pay, or the asset is seized.

In carrying out our responsibilities as professionals, we exercise sensitive professional and moral judgments in all our collection activities. A realistic evaluation of the prospect of recovery is an important part of the decision of how far to go with a collection claim. That’s why asset trace work should be done early in significant cases.

The clients who rely on our firm as commercial collection attorneys expect us to discharge our responsibilities with integrity, objectivity, due professional care, and a genuine interest in serving them in their best economic interest, not ours. They expect and receive efficient, effective representation with their collection matters. We always protect the interest of the clients and give prompt diligent attention to all collection claims.

With a certain volume of bad debts from any one client, we recommend an analysis of that firm’s unique accounts receivable issues and concerns and offer solutions customized for that firm, taking into account the size of the firm, its practices and its client or customer base.

I have had thirty five (35) years of experience in creditor debtor relations, commercial and consumer collection matters, and commercial litigation. I can offer a full array of services to help with every aspect of receivables. You can take advantage of all the services, or select those that help you address the issues of greatest concern to you. However, overall, we utilize an approach that is geared to be cost-efficient for the client, no matter what their size. In the long run, what is best, is often based on strategic planning to develop workable solutions to receivables issues and preventing problems from recurring.

LEGAL FEES

In Texas there are many aspects to handling non-compete agreements. Put simply, non-competition law is filled with traps for the unwary. The economics of the case are very important, and are driven often by legal fees. And they ain’t cheap.

WHAT IT IS

An employer can frequently choose to restrict an employee’s post employment competition with him through a non-competition agreement, which is also commonly referred to as a covenant not to compete. A non-competition agreement typically restrains the employee from engaging in a competing business with his or her former employer, in a certain geographic area, for a limited period of time following the termination of the employment relationship. Or it can restrict the ability of the former employee from doing business with any clients or customers that were clients or customers of the old employer while the former employee was employed at the old firm.

LOOK OUT

Employees presented with a non-competition agreement should carefully consider the impact that the covenant may have upon their future employment in the event that the employment is later terminated.

THE WILD CARD–JUDGES

Lots of judges are reluctant to enforce non-competition agreements, since it means the employee is out of work and unable to support his family. Often it’s the only work he or she knows how to do. The Texas legislature has enacted the Covenants Not to Compete Act (the “Act”), specifically making such agreements enforceable provided there is compliance with all of the provisions of the Act. Consequently, employers seeking to prevent employees from competing after their termination must carefully draft non-competition agreements to fit within the limited perimeters established by the legislature.

The Act provides for certain distinct elements that must be present in order for a non-competition agreement to be enforceable. The agreement must:

• Be ancillary to or part of otherwise enforceable agreement at the time the agreement is made;
• Protect a legitimate business interest;
• Contain reasonable limitations as to the scope of activity to be restrained;
• Contain reasonable geographical limitations; and
• Contain reasonable durational limitations.

There are two classes of non-competes: those that are part of a sale of a business, and are set out in a contract made part of the sale-and instead of involving an employee, involve the former owner. These are very enforceable, and judges consider these much stronger than those involving a “working stiff” former employee. Those will not be discussed here. This discussion relates to former employees.

WORKING STIIFFS

In interpreting the Act’s requirement that the covenant be “ancillary to or part of otherwise enforceable agreement” the Texas Supreme Court has held that an “at-will” employment relationship is not an “otherwise enforceable agreement” since it can be terminated by either party at any time for any reason. For this reason, a non-competition agreement that is ancillary only to an “at-will” employment agreement is invalid, no matter how reasonable in scope. Hence, attorneys generally look at whether or not the employer limited his ability to fire the employee. For if some other thing of real value was given to, or taken by the employee; such as a client list.

Although it happens all the time, an employer cannot require an at-will employee to sign a non-competition agreement without providing some sort of independent “consideration” for the agreement. The consideration may be in the form of a bonus or a payment in addition to the employee’s salary. The consideration can also be a promise to provide confidential or proprietary information to the employee in exchange for the employee signing the non-competition agreement.  Employers actually do this a lot, but they can wind up with an unenforceable noncompete.

Assuming that the non-competition agreement is ancillary to otherwise enforceable agreement, it must still be reasonable in scope of the activity to be restrained. Whether the restrictions are reasonable or not is ultimately up to the judge. The non-competition agreement must restrain no more activity than is necessary to protect the legitimate business interest of the employer. Texas courts have also refused to enforce agreements that prohibit activity unrelated to the work the employee performed for the former employer.

MUST BE REASONABLE IN SCOPE

Similarly, Texas courts have also determined that non-competition agreements that contain no geographical limitations or fail to limit the scope of activity to be restrained are unreasonable and unenforceable. Generally, a reasonable area of restraint consists of only the territory in which the employee worked for the former employer. Courts have also refused to enforce non-competition agreements with nation wide applicability when the employee did not have nation wide responsibilities for the former employer. However, keep in mind that the courts have authority to reform a non-competition agreement to narrow the scope or the geographical area of the agreement so as to make it enforceable. Judges often reform the agreement, and then enforce it.

Many employees assume that if they are laid off or otherwise involuntary terminated by the employer that the employer cannot seek an enforcement of a non-competition agreement previously signed by the employee. Au contraire. They can. Seems unfair? Unless the contract specifically provides that it is only enforceable in the event of the employee’s voluntary termination, then the employer can seek to enforce a non-competition agreement, even when the employer caused the employee to be terminated.

Employees who are presented with a non-competition agreement should carefully consider the impact that the covenant may have upon their future employment in the event that the employment is later terminated. Many employers present these agreements to existing employees after they have been employed for years. It’s never a good idae to sign one, but if you’re threatened with termination, whether to sign or not is a hard decision in most circumstances. Even though no independent consideration may be given for the non-competition agreement, or the agreement is completely invalid on its face as being over-broad in scope or other restrictions, the employee may very well be subjecting himself or herself to a lawsuit in the future by an employer seeking to enforce the non-competition agreement. The price of defending these lawsuits can be extremely costly. Likewise, a future employer may be reluctant to hire or retain an employee who has previously signed a non-competition agreement as the future employer may not want to take the risk of being subjected to a lawsuit involving the non-competition agreement. So the new hire gets fired, or maybe doesn’t even get hired once the new employer gets a demand letter from the old employer’s attorney.