Texas House Bill HB1327

Texas 2021 - 87th Regular

Caption

Relating to the enforceability of covenants not to compete against certain discharged employees.

Impact

The implications of HB1327 are significant for both employers and employees within Texas. By establishing a legal framework that invalidates covenants not to compete for those terminated without just cause, the bill aims to provide employees greater freedom and security in their employment opportunities. This is expected to encourage a more dynamic labor market by allowing discharged employees to pursue new jobs without the fear of legal repercussions stemming from restrictive covenants.

Summary

House Bill 1327 seeks to amend the Business and Commerce Code, specifically focusing on the enforceability of covenants not to compete against employees who have been discharged without 'good cause.' The bill stipulates that such covenants are deemed void and unenforceable when applied to employees who were terminated under circumstances that do not reflect a reasonable basis related to their conduct or job performance. This change is intended to protect employees from unfair restrictions on their ability to seek employment following their discharge.

Contention

Discussions surrounding HB1327 indicate potential contention among different stakeholders. Proponents argue that the bill is essential for ensuring fair treatment of workers and preventing employers from enforcing restrictive agreements that can hinder an individual’s right to work. However, opponents, particularly from the business community, may view this legislation as a hindrance to their ability to protect proprietary interests and maintain competitive advantage. The balance between employee rights and business interests is likely to be a focal point of ongoing debate regarding this bill.