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Texas Non Compete Law: What Employees and Employers Need to Know

Non-compete agreements have become increasingly common in Texas employment contracts, especially in industries involving sensitive information, client relationships, or high-level talent. But these agreements don’t always hold up in court—and in many cases, employees don’t fully understand what they’re signing.

That’s where understanding Texas non compete law becomes essential.

At The Lange Firm, we help both employers and employees navigate the complex legal landscape of non-compete clauses. In this guide, we break down what makes a non-compete agreement enforceable in Texas, what courts will reject, and how to protect your future career or business.

Table of Contents

• What Is a Non-Compete Agreement?

• Is a Non-Compete Agreement Enforceable in Texas?

• Texas Non Compete Law: The Basics

• What Makes a Non-Compete Enforceable in Texas?

• What Makes a Non-Compete Unenforceable?

• Industries Most Affected by Non-Compete Clauses

• Recent Developments in Texas Non Compete Law

• How to Fight a Non-Compete Clause in Texas

• Can an Employer Sue You Over a Non-Compete?

• Tips for Employers Drafting Valid Non-Competes

• How The Lange Firm Can Help

• Final Thoughts

• Related Blogs for Further Reading

What Is a Non-Compete Agreement?

A non-compete agreement is a contract clause that restricts an employee from working for a competitor or starting a competing business for a certain period of time and within a specific geographic area after leaving their job.

The intent is to protect:

• Trade secrets

• Customer relationships

• Confidential business information

• Company investments in training

Is a Non-Compete Agreement Enforceable in Texas?

Yes—but only if it meets strict legal requirements.

Texas courts are wary of enforcing non-compete agreements unless they are clearly limited and tied to a legitimate business interest. Under Texas Business and Commerce Code § 15.50, non-compete agreements must be:

• Ancillary to an otherwise enforceable agreement

• Reasonable in time, geographic scope, and scope of activity

📌 In short, Texas non compete law allows these contracts—but not without clear boundaries.

Texas Non Compete Law: The Basics

Texas is considered employer-friendly, but courts also protect workers from unreasonable restrictions.

✅ Texas courts will enforce a non-compete clause if:

• It is reasonably limited in scope

• It is necessary to protect legitimate business interests

• It is tied to consideration (such as access to confidential information or specialized training)

If the clause is overly broad, the court can reform it to make it enforceable—but only in cases where the employer didn’t act in bad faith.

What Makes a Non-Compete Enforceable in Texas?

To be enforceable, a non-compete clause in Texas must meet all of the following criteria:

✅ 1. Ancillary to an Enforceable Agreement

The non-compete must be part of a valid agreement—usually an employment or confidentiality agreement—and provide something of value (like trade secrets, training, or client introductions).

✅ 2. Reasonable Scope of Activities

It must only restrict activities that directly compete with the former employer.

✅ 3. Reasonable Time Limit

Generally, a restriction lasting 6 months to 2 years is considered reasonable.

✅ 4. Reasonable Geographic Area

It must reflect the actual market area in which the employee worked or had influence.

What Makes a Non-Compete Unenforceable?

A non-compete is likely unenforceable if it:

• Is not supported by consideration

• Covers too broad a geographic area (e.g., all of Texas or the entire U.S.)

• Lasts too long

• Tries to prevent the employee from working in any job (not just competitive ones)

• Is used as a punishment, rather than protection of business interests

Texas courts do not favor blanket restrictions on employment and are quick to strike down unfair clauses.

Industries Most Affected by Non-Compete Clauses

Texas non compete law frequently arises in industries such as:

• Healthcare (physicians, dentists)

• Technology and software

• Sales and marketing

• Finance and insurance

• Professional services (legal, consulting)

• Oil and gas

Special rules apply for certain professions. For example, non-compete agreements for physicians must allow continued patient access and include buyout provisions.

Recent Developments in Texas Non Compete Law

As of now, there have been no major changes to Texas statutes governing non-compete agreements, but federal discussions are ongoing:

• The FTC has proposed a nationwide ban on most non-compete clauses (still under review)

• Some states (like California) have outlawed them, but Texas has not

Employers and employees should stay updated, as national reform may affect enforcement in Texas.

How to Fight a Non-Compete Clause in Texas

If you’re bound by a non-compete you believe is unfair:

✅ Step 1: Have It Reviewed

An attorney at The Lange Firm can examine whether the clause meets Texas legal standards.

✅ Step 2: Attempt Negotiation

Many employers will agree to revise or release you from the agreement, especially if it’s poorly written or outdated.

✅ Step 3: Challenge It in Court

If the agreement is unreasonable, you can seek to have it invalidated or reformed by a judge.

✅ Step 4: Assert Defenses

If your employer breached their contract, failed to provide promised training, or acted in bad faith, the clause may not be enforceable.

Can an Employer Sue You Over a Non-Compete?

Yes. If your employer believes you violated your non-compete clause, they may:

• Send a cease-and-desist letter

• File a temporary restraining order (TRO)

• Sue for breach of contract or damages

However, they must first prove:

• The agreement is valid

• You actually violated the terms

• They suffered harm as a result

Courts weigh reasonableness and fairness, and often side with employees when agreements are too broad or vague.

Tips for Employers Drafting Valid Non-Competes

If you’re a Texas employer, follow these best practices:

• Limit non-competes to key personnel

• Keep geographic and time limits narrow

• Tie the agreement to real value (training, client access, etc.)

• Include a confidentiality agreement for added protection

• Have employees sign at the beginning of employment (or provide new compensation)

A properly crafted agreement can protect your business without overreaching.

How The Lange Firm Can Help

Whether you’re an employee trying to escape an unfair non-compete or an employer trying to protect your business, The Lange Firm can help.

✅ For Employees:

• Review and negotiate your non-compete

• Fight enforcement or file a declaratory judgment action

• Defend against lawsuits for violation

• Protect your right to work

✅ For Employers:

• Draft legally enforceable non-competes

• Reform or enforce agreements through litigation

• Resolve disputes with former employees

• Avoid overstepping with tailored, industry-specific clauses

📞 Contact The Lange Firm today for a consultation and gain clarity about your legal rights and obligations under Texas non compete law.

Final Thoughts

So, what should you know about Texas non compete law?

✅ Non-compete agreements are enforceable in Texas—but only if they’re reasonable, limited, and supported by value.

Whether you’re trying to enforce a contract or protect your right to work, The Lange Firm is here to help you understand and assert your legal rights.