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Quick Answer
Are Non-Compete Agreements Enforceable in Texas? Non-compete agreements may be enforceable in Texas when they satisfy the requirements of the Texas Covenants Not to Compete Act. Key requirements include:
- The covenant must be ancillary to an otherwise enforceable agreement
- It must be supported by adequate consideration— which may require more than continued at-will employment alone without additional enforceable obligations
- Time, geographic, and activity restrictions must be reasonably related to a legitimate business interest
- Courts may reform— rather than void — overly broad restrictions
- Special rules apply for physicians and certain licensed professions
Understanding these requirements may help Texas businesses draft agreements that are more likely to withstand judicial scrutiny.
Key Takeaways
- Texas non-compete agreements are governed primarily by the Texas Covenants Not to Compete Act (Texas Business & Commerce Code §§ 15.50–15.52).
- A covenant must be ancillary to an otherwise enforceable agreement — courts have found that employment contracts supported by access to trade secrets or confidential information may satisfy this requirement.
- Adequate consideration is required; continued at-will employment alone may not always satisfy this requirement without additional enforceable obligations or later performance by the employer — such as actually providing the promised trade secret access or training.
- Reasonable time, geographic, and activity scope restrictions are required — courts analyze all three dimensions and may reform any that are overly broad.
- Texas courts have authority to "blue pencil" — modify rather than void — unreasonable covenants under § 15.51(c), which affects how employers and employees approach enforcement.
- Physicians are subject to special statutory protections including mandatory buy-out provisions and patient-notification rights.
- Federal developments — including the FTC's 2024 rulemaking — have created additional uncertainty; employers should monitor the current status of any applicable federal rules.
- Garden-leave clauses, non-solicitation agreements, and confidentiality provisions may offer alternative or supplementary protections where non-competes face enforceability challenges.
Non-compete agreements occupy a contested space in Texas employment law. On one hand, Texas businesses commonly use them to protect legitimate interests — trade secrets, customer relationships, and specialized training investments. On the other hand, Texas courts scrutinize these agreements carefully, and agreements that are too broad in time, geography, or activity scope may be reformed or face enforcement challenges.
This guide examines the statutory framework governing Texas non-competes, how courts apply reasonableness standards, what constitutes adequate consideration, special rules for certain professions, common drafting mistakes that weaken enforceability, and the evolving federal landscape as of 2026.
Table of Contents
1. Statutory Framework: The Texas Covenants Not to Compete Act
Texas non-compete law is codified primarily in the Texas Covenants Not to Compete Act, found at Texas Business & Commerce Code §§ 15.50 through 15.52. This Act sets the standard for when a covenant not to compete is enforceable and what remedies are available when enforcement is sought.
This statutory language establishes the two-part test courts apply: (1) the covenant must be ancillary to an otherwise enforceable agreement, and (2) the restrictions must be reasonable and no greater than necessary to protect the relevant business interest.
Overview of Enforcement Remedies
Under § 15.51, a court may grant an injunction to enforce a valid covenant, award damages, or reform an unreasonable covenant rather than voiding it entirely. Once an employer establishes the existence of a covenant meeting the statutory framework, employees commonly challenge whether the restrictions are broader than necessary or whether a protectable business interest actually exists — and courts weigh those arguments in analyzing the overall enforceability of the agreement.
| Remedy | When Available | Key Consideration |
|---|---|---|
| Injunctive relief | Valid, enforceable covenant exists | Court may grant temporary or permanent injunction |
| Damages | Breach of valid covenant causing economic harm | Employer must demonstrate actual damages; attorney's fees possible |
| Reformation | Covenant exists but is overbroad | Court narrows restrictions to make them reasonable (§ 15.51(c)) |
| No enforcement | Covenant fails statutory requirements | Fails ancillary requirement or lacks adequate consideration |
The Texas Covenants Not to Compete Act is the controlling statutory framework — non-competes that do not satisfy its requirements generally will not be enforced as written.
2. The Ancillary Agreement Requirement
One of the most litigated elements of Texas non-compete law is the requirement that the covenant be "ancillary to or part of an otherwise enforceable agreement." This means the non-compete cannot stand alone — it must be connected to a separate enforceable promise or agreement.
What Satisfies the Ancillary Requirement
Texas courts have elaborated the ancillary requirement through a series of decisions. The landmark Texas Supreme Court case Light v. Centel Cellular Co. of Texas, 883 S.W.2d 642 (Tex. 1994), established that the ancillary agreement must:
- Give rise to the employer's interest in restraining the employee from competing
- Cause the covenant not to compete to be a reasonable response to the interest created by the enforceable agreement
Risk
Merely conditioning continued employment on signing a non-compete — without providing new consideration or a new enforceable promise — has faced significant scrutiny in Texas courts. Continued at-will employment alone may not always satisfy the consideration requirement without additional enforceable obligations or later performance by the employer. Under Alex Sheshunoff and Marsh USA Inc. v. Cook, courts have analyzed whether the employer subsequently performed on its ancillary promise — meaning the timing and nature of what the employer actually provided matters as much as what was promised at signing.
Mid-Employment Agreements
When a non-compete is introduced after employment has already begun, courts examine whether there was new, independent consideration beyond the existing employment relationship. Common approaches include:
- Providing the employee with access to trade secrets or confidential information not previously disclosed
- Offering a promotion, raise, or new role tied to execution of the covenant
- Granting stock options or other equity-based compensation
- Enrolling the employee in specialized training programs
The ancillary agreement requirement means a non-compete must be connected to a specific enforceable promise — it cannot simply be an add-on to the existing employment relationship without new consideration.
3. Consideration Requirements
Consideration — something of value exchanged between parties — is required for a non-compete to be part of an enforceable contract. In the employment context, Texas courts have addressed what types of consideration are sufficient.
Adequate Forms of Consideration
| Type of Consideration | Generally Sufficient? | Notes |
|---|---|---|
| Initial job offer (at hire) | Generally yes | Non-compete must be presented before or at the time of employment commencement |
| Access to trade secrets | Generally yes | Employer's promise to disclose trade secrets is a recognized form of consideration |
| Specialized training | Generally yes | Must be training beyond ordinary job duties; courts examine whether it was genuinely specialized |
| Promotion or raise | Generally yes (new employment terms) | New compensation tied specifically to execution of the covenant at the time of the change |
| Equity / stock options | Generally yes | Must be a real grant of value, not illusory |
| Continued at-will employment (alone) | May not always be sufficient without more | Under Sheshunoff and Marsh USA, courts analyze whether the employer later performed on an ancillary obligation; continued employment alone without additional enforceable promises or later performance may be insufficient |
| Bonus retention | May qualify if structured as exchange | Courts analyze whether the bonus was genuinely conditioned on execution of the covenant or merely routine pay |
Adequate consideration in Texas non-compete agreements typically flows from specific employer promises — such as trade secret access, specialized training, or new compensation — and continued at-will employment alone may not always satisfy this requirement without additional enforceable obligations or later employer performance.
4. Reasonableness Standards Overview
Even when the ancillary and consideration requirements are satisfied, a non-compete covenant must impose only "reasonable" restrictions. Texas courts analyze reasonableness along three dimensions: time, geographic area, and scope of activity. All three dimensions must independently satisfy the reasonableness standard.
Courts commonly apply a "no greater than necessary" standard: even a restriction that protects a legitimate interest may be unreasonable if it is broader than needed to protect that interest.
All three dimensions of a non-compete — time, geography, and activity scope — must independently satisfy the reasonableness standard and collectively impose no greater restraint than necessary.
5. Time Restrictions: What Texas Courts Have Found Reasonable
Texas law does not specify a maximum permissible duration for non-compete agreements. Courts evaluate time restrictions based on what is reasonably necessary to protect the specific business interest at stake.
| Duration | General Judicial Attitude | Common Contexts |
|---|---|---|
| 6 months – 1 year | Commonly upheld | Lower-level employees, limited customer contact, short product cycles |
| 2 years | Frequently upheld when supported by legitimate interest | Sales professionals, managers with customer relationships, employees with trade secret access |
| 3 years | May be upheld; subject to closer scrutiny | Senior executives, highly specialized roles, significant client relationship development |
| 4–5 years | Faces substantial scrutiny; may be reformed | Business sale covenants, executive-level positions with long-term client relationships |
| Over 5 years | Frequently reformed or challenged | May be considered in business sale contexts; uncommon in pure employment settings |
Better Practice
Matching the duration of the restriction to the estimated "shelf life" of the confidential information or customer relationship being protected — rather than using a default maximum period — may support the reasonableness argument. A restriction tied to the period during which the employer's proprietary information remains competitively sensitive is generally more defensible than an arbitrary term.
Two years is commonly cited as a benchmark in Texas employment non-competes, though courts ultimately assess duration in light of the specific interest being protected rather than applying a fixed rule.
6. Geographic Scope: Defining the Restricted Area
Geographic scope is often one of the most contested dimensions of a Texas non-compete. Courts generally require that the restricted area correspond meaningfully to the employer's actual business operations and the employee's actual role and territory.
Common Geographic Approaches
Risk
Geographic restrictions that describe the entire United States or the "world" for employees with limited or regional roles are among the most commonly challenged provisions. Courts may reform such restrictions down to a reasonable territory — but the resulting reformed scope may be narrower than intended, and the employer may bear litigation costs to get there.
Industry-Specific Considerations
For businesses that operate primarily online or whose customers are geographically dispersed, geographic restrictions may be supplemented — or replaced — by customer-based restrictions that define the restricted territory by reference to the employer's customer list rather than a physical area. Courts have analyzed these customer-based restrictions under the activity scope dimension.
Geographic scope is most defensible when it is defined by the employee's actual assigned territory or areas of customer contact, rather than the employer's maximum possible reach.
7. Activity and Scope Restrictions
The third reasonableness dimension is the scope of the restricted activity itself — what, specifically, the employee is prohibited from doing. Courts require that prohibited activities be reasonably related to the business interest being protected and not extend to activities that pose no genuine competitive threat.
Drafting the Activity Restriction
Activity restrictions commonly appear in one of three forms:
- Industry-wide prohibition: Prohibits working in the same industry in any capacity. Courts frequently scrutinize these as potentially overbroad if the industry is large and the employee's competitive threat is actually limited.
- Role-specific prohibition: Prohibits working in a specific role (e.g., "in a sales capacity for a competing software company"). Generally regarded as more defensible when it tracks what the employee actually did.
- Customer/client solicitation prohibition: Prohibits soliciting or serving specific customers with whom the employee had contact. Often considered narrower and more defensible than broader prohibitions — and frequently overlaps with non-solicitation agreements.
Better Practice
Limiting the prohibited activity to the specific role the employee performed — rather than broadly prohibiting any work for a competitor — may make the restriction more defensible. An engineer who developed a specific product being barred from developing competing products may be treated differently than the same engineer being barred from any employment at any competitor.
Activity restrictions that track the employee's actual role and the specific competitive threat to the employer's legitimate interests tend to be more defensible than industry-wide prohibitions.
8. Court Reformation: Blue Penciling in Texas
One distinctive feature of Texas non-compete law is the statutory authority for courts to reform — rather than void entirely — an unreasonable covenant. This is commonly referred to as "blue penciling."
What Blue Penciling Means in Practice
When a court finds a covenant unreasonable, it may narrow the restriction — for example, reducing a five-year period to two years, or shrinking a nationwide geographic restriction to the employee's actual sales territory. The court does not simply strike the entire covenant.
Blue penciling means a Texas court may narrow an overbroad covenant rather than void it — but litigation is required to get there, and an employer who knew the covenant was unreasonable when it was drafted may face attorney's fee liability.
9. Legitimate Business Interests Texas Courts Recognize
A non-compete must protect a "legitimate business interest." Texas courts have identified several categories of business interests that may justify a non-compete covenant.
| Business Interest | Description | Strength as Justification |
|---|---|---|
| Trade secrets | Proprietary formulas, processes, methods, or technical data | Strong — frequently recognized as a core justification |
| Confidential business information | Pricing strategies, customer data, business plans not qualifying as trade secrets | Strong — commonly cited alongside trade secrets |
| Customer goodwill and relationships | Long-standing relationships developed at the employer's expense | Strong — particularly for sales and client-facing roles |
| Specialized training investment | Employer-provided training that creates specialized competitive skills | Moderate — must be genuinely specialized, not routine onboarding |
| Employee relationships / team stability | Protecting against raiding of key personnel | Moderate — typically addressed through non-solicitation clauses |
| General competitive position | Desire to prevent competition generally | Weak — generally insufficient without a more specific interest |
Trade Secrets as a Justification
Access to trade secrets is among the strongest justifications for a non-compete in Texas. The Texas Uniform Trade Secrets Act (Texas Civil Practice & Remedies Code §§ 134A.001–134A.008) provides a framework for what qualifies as a trade secret — generally, information that derives independent economic value from not being generally known and that is subject to reasonable efforts to maintain its secrecy.
The strongest non-compete justifications in Texas involve specific, demonstrable business interests — trade secrets, confidential client information, and substantial goodwill developed at the employer's expense — rather than a general desire to limit competition.
10. Special Rules for Specific Industries and Professions
Physicians
Texas has specific statutory provisions governing physician non-competes under Texas Business & Commerce Code § 15.50(b). These provisions provide special protections for patients and physicians not available in other employment contexts.
Attorneys
Texas attorneys are subject to the Texas Disciplinary Rules of Professional Conduct, which impose significant restrictions on non-compete agreements involving lawyers. Rule 5.06 generally prohibits a lawyer from offering or making an agreement that restricts the right of a lawyer to practice after termination of the relationship, with limited exceptions for retirement benefits. This generally means that traditional employment-style non-competes are not permissible for Texas attorneys under professional conduct rules.
Other Healthcare Professionals
Non-competes for nurses, therapists, pharmacists, and other licensed healthcare professionals are subject to general Texas non-compete standards, but the nature of the work and the public interest in patient access to care may be relevant factors in reasonableness analysis. Some courts have taken patient access considerations into account in healthcare non-compete enforcement proceedings.
Financial Services and Securities Professionals
Employees in broker-dealer and investment advisory firms may be subject to FINRA (Financial Industry Regulatory Authority) rules and industry arbitration procedures in addition to Texas state law. The Protocol for Broker Recruiting — a voluntary agreement among participating firms — has affected how non-solicitation and non-compete terms are handled in securities industry transitions. Employers and employees in this sector commonly consider both state law and applicable industry frameworks.
Franchise Agreements
Franchise agreements often contain non-compete provisions that govern both the duration of the franchise relationship and post-termination restrictions. Texas courts analyze franchise non-competes under the same § 15.50 framework, though the business-sale analogy may be relevant depending on how the franchise relationship is structured.
Physician non-competes in Texas must include statutory buy-out and patient-notification provisions; attorney non-competes face professional conduct restrictions that generally prohibit traditional enforcement; other industries have their own applicable overlays.
11. Federal Developments: The FTC Non-Compete Rule
In April 2024, the Federal Trade Commission issued a final rule that would have broadly prohibited most non-compete clauses in employment agreements nationwide — with limited exceptions for senior executives and business sale transactions. The rule, if fully in effect, would have represented a major departure from the existing state-law framework governing non-competes.
What the FTC Rule Would Have Done
The proposed FTC rule would have:
- Banned new non-compete agreements for virtually all workers
- Required employers to provide notice to workers subject to existing non-competes that those agreements would not be enforced
- Permitted existing non-competes for "senior executives" (earning above a threshold in policy-making positions) to remain in effect
- Continued to allow non-competes in connection with the bona fide sale of a business
The federal non-compete landscape was significantly unsettled as of 2026; Texas employers may benefit from monitoring official sources for the current status of any applicable federal rule before drafting or enforcing non-compete agreements.
12. Non-Compete Alternatives and Supplementary Protections
Given the enforceability challenges that non-competes may face, many Texas employers also use — or consider as alternatives — other contractual protections that may be subject to fewer restrictions.
| Agreement Type | What It Covers | Enforceability in Texas |
|---|---|---|
| Non-disclosure / confidentiality agreement (NDA) | Prohibits disclosure of trade secrets and confidential information | Generally strong; can survive even where non-compete fails |
| Non-solicitation (customers) | Prohibits soliciting the employer's customers for a defined period | Generally enforceable when reasonably limited; may face § 15.50 analysis if construed as a non-compete |
| Non-solicitation (employees) | Prohibits recruiting or soliciting the employer's employees | Generally enforceable; reasonable time and scope required |
| Garden leave clause | Requires the employee to remain employed (but inactive) during notice period | Less commonly used in Texas; effect depends on contract terms and at-will status |
| IP assignment agreement | Assigns inventions and work product to employer | Generally enforceable; subject to Texas Labor Code § 15.51 for certain employee inventions |
Non-Solicitation vs. Non-Compete
Texas courts analyze customer non-solicitation agreements using the same § 15.50 framework if the court views them as functionally equivalent to non-compete agreements. A non-solicitation clause that effectively prevents the employee from working in the same industry may be treated as a non-compete regardless of its label. Narrowly drawn non-solicitation agreements — covering only customers with whom the employee had direct contact — are generally more defensible.
Better Practice
A layered approach — NDA covering trade secrets, customer non-solicitation covering active accounts, employee non-solicitation covering key team members, and a narrowly scoped non-compete — may provide more durable protection than relying on a single broad non-compete that faces greater enforcement risk.
Confidentiality, non-solicitation, and IP assignment agreements may provide significant protection independent of — and in some cases more reliably than — traditional non-compete covenants.
13. Common Drafting and Enforcement Mistakes
Common Mistake Using a One-Size-Fits-All Template Without Role Customization
Applying the same non-compete terms — same duration, same geographic scope, same activity restrictions — to every employee regardless of role, seniority, or actual competitive risk significantly weakens enforceability. Courts may find that terms appropriate for a senior sales director are overbroad for an entry-level technician with no customer contact.
Common Mistake Relying on Continued Employment as the Only Consideration
Presenting a non-compete to an existing employee and stating that failure to sign will result in termination — without providing any new consideration or enforceable obligation — may not satisfy the consideration requirement in Texas. Continued at-will employment alone may not always be sufficient without additional enforceable obligations or later employer performance. Businesses commonly pair mid-employment non-competes with a specific new benefit, promotion, or access to confidential information to support the consideration analysis.
Common Mistake Geographic Scope That Exceeds the Employee's Actual Territory
Applying a nationwide or statewide geographic restriction to an employee whose role was limited to a single metropolitan area may result in reformation to a narrower territory — or provide grounds for challenging the agreement's overall reasonableness. The geographic scope should be tailored to the employee's actual area of operation.
Common Mistake Failing to Define What Constitutes a "Competitor"
Vague restrictions against working for "any competitor" without defining what a competitor is — or how that is assessed — create ambiguity that courts must resolve. Agreements that define the restricted competitive activity with specificity tend to be clearer and more enforceable than those using general terms.
Common Mistake Not Including an At-Will Preservation Clause in Employment Agreements
As discussed in the context of the at-will employment article in this series, employment agreements containing non-competes should include language preserving at-will status and clarifying that the agreement does not guarantee employment for any specific duration — unless that is intended.
Common Mistake Forgetting to Address Business Sale Non-Competes Separately
Non-competes entered into in connection with the sale of a business are analyzed differently from employment non-competes — courts generally apply a more permissive reasonableness standard because the seller received business value for the goodwill being protected. Treating a business-sale non-compete the same as an employment non-compete may result in an unnecessarily narrow restriction.
Common Mistake Ignoring the Physician-Specific Statutory Requirements
Healthcare employers who use standard non-compete templates for physician employment agreements without incorporating the § 15.50(b) buy-out and patient-notification provisions may face enforceability challenges specific to physician agreements — even if the general § 15.50(a) standards are otherwise met.
Common MistakeNot Monitoring the Federal Landscape
The FTC's 2024 rulemaking and associated litigation have created ongoing uncertainty about the federal non-compete landscape. Businesses that drafted non-competes before 2024 — or that have not revisited their agreements since then — may benefit from reviewing whether any applicable federal developments affect how those agreements can be enforced or whether notice obligations apply.
14. Non-Compete Drafting and Review Checklist
☐ The non-compete is ancillary to an otherwise enforceable agreement — there is a specific employer promise (trade secret access, training, new compensation) that justifies the restriction
☐ Adequate consideration is identified and documented — and does not rely solely on continued at-will employment without additional enforceable obligations or employer performance
☐ The time restriction is specifically calibrated to the nature of the business interest (e.g., length of time confidential information remains competitively sensitive)
☐ The geographic restriction corresponds to the employee's actual territory, customer contacts, or area of operations — not the employer's maximum possible market
☐ The activity restriction is limited to activities that actually threaten the employer's protectable interest, not all work in the same industry
☐ The agreement identifies the specific business interest(s) being protected (trade secrets, customer goodwill, confidential information)
☐ For physician agreements: buy-out provision, patient-notification rights, and continuity-of-care protections are included per § 15.50(b)
☐ The agreement is not being used for an attorney subject to Texas Disciplinary Rule 5.06
☐ For mid-employment non-competes: new, independent consideration has been provided, documented, and specifically connected to the covenant
☐ The agreement is accompanied by or integrated with a confidentiality/NDA provision to ensure protection survives even if the non-compete is reformed
☐ A non-solicitation provision (customer and/or employee) supplements the non-compete with independently enforceable protections
☐ The agreement includes an at-will employment preservation clause where appropriate
☐ The agreement has been reviewed in light of the current status of any applicable FTC non-compete rulemaking
☐ Non-compete terms are tailored by employee role and seniority — not applied uniformly to all employees
☐ Existing non-compete agreements are reviewed periodically as business circumstances, employee roles, and legal developments change
Primary Government Sources
🔗 Texas Business & Commerce Code Chapter 15 — Covenants Not to Compete Act (statutes.capitol.texas.gov)
🔗 Texas Uniform Trade Secrets Act — Civil Practice & Remedies Code Chapter 134A
🔗 FTC Non-Compete Rule — Federal Trade Commission (check for current status)
🔗 State Bar of Texas — Law FAQs for the Public
16. Frequently Asked Questions
Are non-compete agreements enforceable in Texas?
Non-compete agreements may be enforceable in Texas if they satisfy the requirements of the Texas Covenants Not to Compete Act (Texas Business & Commerce Code § 15.50). The agreement must be ancillary to an otherwise enforceable agreement, supported by adequate consideration, and impose only reasonable limitations on time, geographic area, and scope of activity. Agreements that fail any of these requirements may be reformed by a court or may not be enforced as written.
What makes a non-compete agreement enforceable in Texas?
Texas courts generally apply a two-part framework under § 15.50: (1) the covenant must be ancillary to an otherwise enforceable agreement — such as an employment contract supported by an employer's promise to provide trade secret access or specialized training — and (2) the limitations on time, geography, and activity scope must be reasonably related to a legitimate business interest being protected, such as trade secrets, confidential information, or customer goodwill.
How long can a non-compete last in Texas?
Texas law does not set a fixed maximum duration. Courts analyze whether the time restriction is reasonable given the circumstances. Agreements of two years or less are commonly upheld; restrictions of three to five years face greater scrutiny. Longer periods may be reformed rather than voided entirely. The appropriate duration generally depends on how long the relevant confidential information remains competitively sensitive and how long customer relationships take to develop.
What geographic area is reasonable for a Texas non-compete?
Reasonable geographic scope depends on the nature of the employer's business and the employee's role. Courts have upheld restrictions limited to territories where the employee actually worked or had customer contacts. Statewide or nationwide restrictions may be upheld in some circumstances — particularly for senior employees with broad territories — but overly broad geography may be narrowed through court reformation rather than treated as void.
Can a Texas court modify an overly broad non-compete instead of voiding it?
Yes. Texas Business & Commerce Code § 15.51(c) authorizes courts to reform — rather than void — an unreasonable covenant to the extent necessary to make it reasonable. This "blue penciling" approach means an employer may still obtain some enforcement of an overbroad agreement, but only after litigation, and only on the narrowed terms the court determines are reasonable. If the employer knew the covenant was unreasonable when it was signed, the employee may be entitled to attorney's fees.
Is consideration required for a Texas non-compete?
Yes. The covenant must be ancillary to an otherwise enforceable agreement and supported by consideration. In the employment context, consideration commonly takes the form of an initial employment offer, access to trade secrets, specialized training, or equity compensation provided as part of the employment relationship. Continued at-will employment alone may not always satisfy this requirement without additional enforceable obligations or later performance by the employer — a nuance clarified by the Texas Supreme Court in Sheshunoff and Marsh USA.
Can a non-compete be signed after employment begins in Texas?
Yes — mid-employment non-competes may be enforceable in Texas if they are supported by new consideration or enforceable obligations beyond the existing employment relationship. Under the Texas Supreme Court's decisions in Alex Sheshunoff Management Services, L.P. v. Johnson and Marsh USA Inc. v. Cook, 315 S.W.3d 515 (Tex. 2010), courts have analyzed whether the employer subsequently performed on its ancillary obligation — meaning a covenant may become enforceable once the employer actually provides the promised trade secret access or training, even if the covenant was executory at the time it was signed. Continued at-will employment alone may not always be sufficient without additional enforceable obligations or later employer performance.
Do non-competes apply to independent contractors in Texas?
Non-compete agreements may apply to independent contractors in Texas, not just employees. The enforceability analysis generally applies similar principles — the restriction must be ancillary to an enforceable agreement and reasonably limited in time, geography, and scope. Whether a worker is properly classified as an independent contractor is a separate but related issue that may also affect other aspects of the working relationship.
Are non-competes enforceable for all professions in Texas?
Texas law contains specific restrictions for certain professions. Physicians are subject to special requirements under Texas Business & Commerce Code § 15.50(b), including mandatory buy-out provisions and patient-notification rights. Attorneys are generally subject to Texas Disciplinary Rule 5.06, which restricts agreements that limit a lawyer's right to practice after leaving a firm. Other licensed professionals may have industry-specific frameworks applicable to their agreements.
What is the FTC non-compete rule and does it affect Texas employers?
The FTC issued a rule in 2024 that would have broadly banned most non-compete agreements nationally. As of 2026, that rule has faced significant legal challenges — including a district court ruling in Texas blocking its enforcement — and its status remains subject to ongoing litigation and potential administrative or legislative developments. Texas employers may benefit from verifying the current status of any applicable federal non-compete rulemaking through the FTC's official website before drafting or enforcing non-compete agreements.