Texas Noncompete Agreement: What's Included and Enforceability

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Is a Non-Compete Agreement Enforceable in Texas?

In Texas, non-compete agreements that restrict employees from competing against former employers in similar industries are permitted and can be legally enforced. For a non-compete agreement to be legally enforceable, it must meet certain requirements laid out in Texas state laws.

Some of these requirements include:

• The non-compete must be signed at the time of employment and be ancillary or part of an offer for employment.
• There must be limitations on the duration of the agreement and the geographical area the agreement covers.
• There must be limitations on the scope of activity that the agreement restricts.
• Physicians who sign non-compete agreements cannot be denied access to a list of previous patients and medical records.
• Attorneys cannot participate in non-compete agreements.

As long as these conditions are met, most non-compete agreements will be enforced in Texas.

How Long Does a Texas Non-Compete Agreement Last?

The Texas Court of Appeals has regularly enforced non-compete agreements that last between two and five years. This time frame has been ruled reasonable in the eyes of the court.

When looking at the duration of a non-compete agreement, courts will also consider the geographic boundary. The geographic area that is restricted under the non-compete agreement must be an area where the employee or worked or where the employer conducts business.

How Do You Get Around a Non-Compete Agreement in Texas?

Even though non-compete agreements are enforceable in Texas, there are a few ways to potentially get around them.

Here are some of the ways:

1. Challenge the agreement's validity. You may be able to challenge the validity of the non-compete agreement if it is overly restrictive in terms of time, geographic scope, or the type of work it covers. The agreement must be reasonable and not impose undue hardship on the employee.
2. Negotiate with your employer. If the non-compete agreement is overly restrictive, you can try negotiating with your employer to have it modified or narrowed.
3. Look for a loophole. Sometimes non-compete agreements contain loopholes or exceptions that you can exploit. For example, the agreement may not apply to certain geographical areas or job functions.
4. Wait it out. If the non-compete agreement has a time limit, you can simply wait until it expires before entering into competition with your former employer.
5. Ask the court to modify. Texas allows courts to “blue pencil” or modify overly broad or restrictive non-compete agreements. If a term or restraint is more than necessary to protect the employer’s interests, you can request that the term be reasonably modified.

What Happens If You Break a Non-Compete Agreement in Texas?

If you violate a legally enforceable non-compete agreement, you could face serious repercussions. Once a non-compete is violated, your former employer can petition the court for an injunction to order you to stop the activity that violates the contract. From there, your former employer could file a lawsuit against you for breach of contract in an attempt to recover financial damages.

Texas allows punitive damages to be awarded in breach of contract cases. This means that the breaching party could be fined for their wrongdoing on top of any damages the court has already awarded the non-breaching party. In past cases, Texas courts have awarded employers over $100,000 in punitive damages following a breach of a non-compete agreement.

What Voids a Texas Non-Compete Agreement?

A non-compete agreement in Texas will be void if it lacks adequate consideration. Continued employment is not adequate consideration in Texas so when a new employee signs a non-compete, it must be supported by independent valuable consideration like a new position, raise in pay, or additional benefits.

See Noncompete Agreement by State

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Need help with a Noncompete Agreement?

Meet some of our Texas Noncompete Agreement Lawyers

Darryl S.

Darryl S.

I offer flat/fixed fees rather than hourly work to help lower your legal costs and align our interests. I specialize in contract law and focus on making sure your contract is clear, protects your interests and meets your needs. You can expect fast, straightforward communication from me, making sure you understand every step. With my experience, you'll get a detailed review of your contract at a fair, fixed price, without any surprises. I have over 30 years of business and legal experience that I bring to your project. I graduated from The University of Texas School of Law with High Honors in 1993 and practiced at Texas' largest law firm. I have founded companies and so understand how to be helpful as both a lawyer and business owner.

J.R. S.

J.R. S.

Experienced Attorney with an MBA in Finance who provides a business-oriented mindset and thrives in a collaborative environment with a-typical challenges. Possesses exceptional skills in legal research, drafting and enforcing contracts, skillful in negotiations and mediations, drafts extremely persuasive pleadings, attacks depositions with zeal for my clients. Experience includes Business Management and IT Consulting with a successful track record managing outside relationships, associated costs, and optimizing outcomes for client(s). Effectively restructures antiquated business processes and incorporates technology and best practices to effectuate progressive outcomes for business clients. Partners collaboratively with business leaders to advance company objectives while minimizing risk to ensure internal and external compliance, increased profitability, and diverse practices. Dynamic communicator with the interpersonal skills to build trusting relationships with executives, management, and employees of various backgrounds, expertise, and styles.

Michelle T.

Michelle T.

I am an experienced, well-rounded attorney with a background specializing in trusts and estates, contracts and business law. I have extensive experience working with simple contracts all the way up to multi-million dollar deals.

Lynette P.

Lynette P.

I am licensed in both Texas and Arkansas but actively working in Arkansas. My primary focus is criminal defense, family law, and estate planning (wills and trusts).

Matthew W.

Matthew W.

I represent startups, investment firms, and individuals frequently with equity and debt financing, M&A transactions, and commercial contracts.

Brian S.

Brian S.

I am a corporate lawyer with over 15 years of experience in litigation and in advising companies on a variety of legal issues, including mergers and acquisitions, securities regulations, and contract negotiations. I have a deep understanding of the technology industry and have represented numerous tech companies in my career.

Aaron S.

Aaron S.

My passion is protecting the passions of others. I have 5+ years of contract review, and all aspects of entertainment law including negotiation, mediation, intellectual property, copyright, and music licensing. I also have experience working with nonprofits, and small businesses helping with formation, dissolution, partnerships, etc. I am licensed in both Texas and California.

Find the best lawyer for your project

Noncompete agreement and severance packages?

I recently left my job of 5 years, where I had signed a non-compete agreement. I am now negotiating a severance package with my former employer and am unsure of what my rights and obligations are regarding the non-compete agreement. I am seeking clarification on how the non-compete agreement should be handled in relation to the terms of my severance package.

Diane D.

To be able to answer this question, I would need to see the agreements. No one can answer your question without seeing the agreements.

Noncompete agreement for consultants?

I am a consultant who is looking to take on a new client, but the client requires me to sign a Noncompete Agreement. I want to make sure that I am not signing away my rights, and that the agreement is fair and reasonable. I am also interested in understanding how this agreement would affect my ability to work with other clients.

Venus C.

Hello. I appreciate your concerns about signing a Noncompete Agreement. It's essential to protect your rights and ensure the agreement is fair and reasonable given that a noncompete typically restricts competing activities during or after the term of engagement. Without knowing more about the business relationship and reviewing the actual terms, whether the non-compete is fair, reasonable, or even enforceable remains an open-ended question. Bearing this in mind, if the noncompete is preventing you from taking on other clients during or after the end of your relationship (or both), the scope of this restriction must be reasonable in terms of time, geographic area, and the specific activities it seeks to prevent. For example, does the noncompete specify the types of clients, industries, or geographic areas that are off-limits? What is the duration of the noncompete? If the client breaches your main agreement, will that render your noncompete void and unenforceable? These are just a few general questions that require a thorough review and analysis against Florida non-compete laws. Overall, the ultimate goal is to carefully review the terms to understand how they might impact your ability to take on new clients. If you don’t understand or are unsure about the contractual terms and their legal implications, it's highly recommended you consult with an attorney who can review the noncompete and provide you with personalized legal advice before you sign.

Could someone go to jail if they are accused of fraud for never intending to not breaching his or her non compete non solicit contract?

I am really curious when employment contract can become criminal. Is it criminal to ask you coworker to come work with you, considering if you are accused of fraud for breaching non compete non solicit?

Matthew S.

No, this at worst is a civil matter and not a criminal matter. F