Texas takes a middle-ground approach to non-competes. They are enforceable, but under specific statutory requirements that the employer must meet. The Covenants Not to Compete Act, Tex. Bus. & Com. Code §§ 15.50–15.52, sets the framework, and Texas courts apply it with a "reasonable in scope" lens.
Unlike California's outright ban or some Northeast states' high-salary thresholds, Texas asks whether the restriction is justified by a legitimate business interest and tailored to protect it without unduly restraining the employee.
The rule, in plain terms
- § 15.50 requirements: A non-compete is enforceable if (a) ancillary to or part of an otherwise enforceable agreement, and (b) reasonable in time, geographic area, and scope of activity such that it does not impose a greater restraint than necessary to protect the employer's goodwill or other legitimate business interest.
- "Ancillary to an enforceable agreement": The non-compete must be tied to consideration beyond continued at-will employment. Common sources: access to confidential information, specialized training, stock options or equity grants, or partnership interests.
- Reasonable time: Typically 6 months to 2 years; longer durations require strong justification.
- Reasonable geography: Tied to the area where the employee actually worked or where the employer's customers are. State-wide or national restrictions are scrutinized.
- Reasonable scope of activity: Tied to the specific activities the employee performed, not the entire industry.
- Reformation available: § 15.51 expressly allows a court to reform an overly broad non-compete to make it reasonable, rather than striking it entirely. This is a meaningful difference from many states.
- Equitable relief: Injunctions are common remedies. Damages may also be available if the employee violated a reasonable non-compete.
- Physicians and certain professionals: § 15.50(b) provides specific rules for physicians, requiring buyout provisions and other protections.
Scripts to use
When you receive a cease-and-desist letter:
"I have reviewed the non-compete in my [date] agreement with [former employer]. Under Texas Bus. & Com. Code § 15.50, a non-compete is enforceable only if it is ancillary to an otherwise enforceable agreement and reasonable in time, geography, and scope. The provision as drafted [identify specific overreach — too broad geographically, too long, covers activities I did not perform]. I ask that the employer withdraw the demand within 14 days."
When proposing a narrowed version:
"Without conceding the enforceability of the agreement as drafted, I am willing to honor the following narrowed terms: [duration of N months, geographic area limited to specific cities, activities limited to specific services]. This is the scope reasonable under § 15.50."
When negotiating an exit:
"As part of the separation, please confirm in writing that the non-compete in my [date] agreement will be modified to [duration, geography, scope] or waived entirely. In exchange, I will [release of claims, return of property, transition assistance]."
What to document
- The non-compete agreement with the signature page
- The consideration supporting the agreement (offer letter, equity grant, training records)
- Your actual job duties and territory during employment
- The employer's customer base and geographic reach
- Any prior versions of the agreement and any signed amendments
- Communications from the former employer about enforcement
When to escalate
If a former employer attempts to enforce a non-compete:
- Consult a Texas employment attorney as soon as possible. Many enforcement disputes turn on the speed of response — both sides may seek expedited injunctive relief.
- The new employer often has a parallel interest and may share counsel or jointly defend.
- Most Texas non-compete disputes resolve through narrowing the scope rather than enforcing the original terms. Reformation is a real option.
- Preserve all communications. Employer overreach (asserting terms broader than reasonable) can support a tortious interference or business-disparagement counterclaim.
Texas's enforcement regime is more employer-friendly than California's but more employee-friendly than the "broad enforcement" states that lack reasonableness scrutiny. The reasonableness test gives both sides room to negotiate, and most disputes settle on narrowed terms rather than full enforcement.
Educational content only — not legal advice. Employment law varies by jurisdiction and situation. Consult a qualified employment attorney for advice specific to your circumstances.