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Are Non-Compete Clauses Enforceable in Texas? What Employees and Employers Need to Know

Non-compete clauses are common in employment contracts, especially in industries like tech, healthcare, sales, and law. But Texas courts don’t automatically enforce them. In fact, they’re often challenged for being too broad or restrictive.

So, are non-compete clauses enforceable in Texas? The answer is: Yes, but only under specific conditions.

At The Lange Firm, we help both employees and employers understand their rights when it comes to non-compete agreements. Whether you’re being asked to sign one or trying to enforce one, this guide breaks down the essentials under Texas law.

What Is a Non-Compete Clause?

A non-compete clause, or covenant not to compete, is a contract term that restricts an employee from working for a competitor or starting a competing business after leaving a job.

They often include limitations based on:

• Time (e.g., “within two years”)

• Geography (e.g., “within 50 miles”)

• Scope of activity (e.g., “in the same industry or role”)

But not all of them are legally enforceable—especially in a state like Texas, where courts weigh employee rights heavily.

Texas Non-Compete Law: The Basics

Under the Texas Business and Commerce Code §15.50, non-compete clauses are enforceable only if they are:

1. Ancillary to an otherwise enforceable agreement, and

2. Contain reasonable limitations as to:

   • Time

   • Geographic area

   • Scope of activity

The key word here is reasonable. Texas courts will strike down or modify non-compete clauses that are too broad.

When Is a Non-Compete Enforceable in Texas?

To be legally binding, a Texas non-compete must meet these tests:

✅ 1. Ancillary to an Enforceable Agreement

There must be a valid agreement in place—typically an employment contract where:

• The employer promises to provide confidential information, trade secrets, or specialized training

• The employee agrees not to compete using that proprietary knowledge

Without this mutual exchange, the non-compete will likely be invalid.

✅ 2. Reasonable in Scope

Texas courts will ask:

• Is the time limit fair? (Usually 6–24 months is considered reasonable)

• Is the geographic limit too broad? (Restrictions should match the actual area the employee worked in)

• Is the activity restriction too vague? (It should relate directly to the employee’s prior role)

The Lange Firm can help evaluate or draft non-compete terms that are enforceable without overreaching.

When Is a Non-Compete NOT Enforceable?

❌ Overly Broad Restrictions

A non-compete that says you can’t work “anywhere in the United States” in “any role” in a given industry is unlikely to hold up.

❌ No Legitimate Business Interest

If the employer didn’t provide confidential information, trade secrets, or specialized training, they may have no enforceable interest to protect.

❌ Lack of Consideration

If the clause was added after employment started and the employer gave nothing in return, courts might reject it.

Insert backlink here to: “Non-Disparagement Clauses in Texas” as it relates to post-employment restrictions.

Can Texas Courts Modify Non-Compete Clauses?

Yes. Under a legal concept called “blue penciling”, Texas judges can revise overly broad non-competes to make them enforceable.

For example, a court might:

• Reduce the time limit from 3 years to 1

• Narrow the geographic scope from statewide to local counties

• Limit the scope to just your previous position or department

This means employers don’t automatically lose—but they must be willing to accept a scaled-back version of the clause.

Non-Compete Clauses and At-Will Employment

Even in at-will employment (where you can be fired or quit at any time), non-competes can still be enforceable—if the clause meets Texas law requirements.

But courts will be skeptical if the employer uses a non-compete as punishment for quitting rather than a legitimate protection of trade secrets or client relationships.

Can You Be Sued for Violating a Non-Compete in Texas?

Yes. If your former employer believes you’re violating a valid non-compete, they may file a lawsuit seeking:

• An injunction to stop you from working or operating

• Monetary damages for lost business

• Attorneys’ fees (if the contract allows)

This is why it’s essential to consult an attorney before accepting a job in a similar field or starting a competing business.

The Lange Firm defends employees and negotiates settlements to avoid prolonged litigation.

What to Do If You’re Asked to Sign a Non-Compete

Before signing:

• Read the clause carefully—what activities are restricted?

• Ask for clarification on how “competition” is defined

• Negotiate the scope if it feels too broad

• Get legal review from a qualified employment attorney

Signing without understanding the restrictions could hurt your future career mobility.

What If You Already Signed a Non-Compete?

Even if you’ve already signed, there may be options:

• Negotiate release from the clause

• Request a legal opinion on enforceability

• Challenge it in court if you’re sued

• File a declaratory judgment to clarify your rights

Every situation is unique—especially in complex or high-level roles. Let The Lange Firm assess your case and develop a strategy.

Non-Compete Alternatives for Employers

If you’re an employer looking to protect business interests without violating Texas law, consider:

• Nondisclosure agreements (NDAs)

• Nonsolicitation clauses (to prevent poaching clients or staff)

• Training reimbursement clauses

• Customized non-competes based on role or industry

Our legal team drafts compliant agreements that are tailored—and defensible—in Texas courts.

Final Thoughts: Are Non-Compete Clauses Enforceable in Texas?

Yes—but only when they’re narrowly written, tied to legitimate business interests, and supported by a valid contract. Whether you’re an employee facing a job offer or an employer drafting a policy, you need legal insight to avoid costly mistakes.

📞 Contact The Lange Firm today for a consultation. We’ll help you protect your rights and your future.