Are Non-Competes Enforceable in Texas? (2026)

How Texas Law Treats Non-Compete Agreements

Texas takes a middle-ground approach. Non-competes are not banned, but they are not automatically valid either. Under Texas Business and Commerce Code Section 15.50, a covenant not to compete is enforceable only when it is ancillary to an otherwise enforceable agreement and contains reasonable limits.

The state also makes its rules exclusive. Section 15.52 confirms that Texas’s statutory framework preempts other law, including common law, when courts evaluate these covenants.

Requirements for a Valid Non-Compete in Texas

For a Texas non-compete to hold up, several boxes must be checked. The covenant must be part of an enforceable agreement at the time it is signed—such as a Texas non-disclosure agreement—and must protect a legitimate business interest, typically goodwill, confidential information, or trade secrets.

Key requirements generally include:

• The agreement must be ancillary to an enforceable contract. If you are unsure what a contract of employment is in this context, it generally includes the initial offer or terms under which you receive specialized training and access to protected company data.
• Limits on time, geography, and scope of restricted activities must be reasonable.
• The restraint cannot exceed what is necessary to protect the employer’s interests.

Special statutory rules apply specifically to physicians. Under Section 15.50(b), a physician non-compete must not deny the physician access to a list of patients seen within one year of termination, must provide access to medical records upon patient authorization, must include a buyout of the covenant at a reasonable price or as determined by a mutually agreed upon arbitrator, and must allow the physician to provide continuing care to specific patients during the course of an acute illness.

Other medical professionals, such as dentists, nurses, and physician assistants, do not have specific statutory carve-outs and are instead evaluated under the standard reasonableness requirements.

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Geography and Duration Limits

Texas courts look closely at three things: how long the restriction lasts, where it applies, and what activities it covers. There is no single magic number, but the restriction must match the employer’s legitimate interest.

For most non-medical roles, courts often view one to two years as reasonable. Geography should reflect where the employee actually worked or had customer contact – not the entire country if the employee only served Dallas-Fort Worth.

For licensed physicians, the statute requires specific buyout and patient access terms, but time and geographical limitations must still be evaluated to ensure they are reasonable and do not impose a restraint greater than necessary to protect the goodwill or other business interest of the employer.

If a court finds the limits unreasonable, it does not automatically toss the agreement. Under Section 15.51, the court will reform the covenant to make it reasonable and then enforce the modified version.

Consequences of Violating a Non-Compete in Texas

Committing a breach of employment contract by violating a valid non-compete can be costly. Courts may award the employer damages, injunctive relief stopping you from continuing the competing work, or both.

There is one important wrinkle: if the court has to reform the agreement because it was too broad, the employer cannot recover damages for any breach that happened before reformation. Relief is limited to an injunction.

Trade secret misappropriation can pile on additional liability. Under the Texas Uniform Trade Secrets Act, Chapter 134A, employers may obtain injunctions and recover actual losses, unjust enrichment, or a reasonable royalty when confidential information is misused.

Options for Challenging or Negotiating a Non-Compete

You have more leverage than you might think. Before signing or fighting, consider these approaches:

• Negotiate narrower terms upfront – shorter duration, smaller geographic area, or a focus only on direct competitors.
• Request a clear definition of what counts as “competing” activity.
• Ask for a severance trigger or paid garden leave during the restricted period.
• Challenge enforceability if the employer never provided the promised confidential information or training.

If you are already locked in, an attorney can review whether the agreement meets Texas’s reasonableness test or whether reformation might shrink its reach.

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