Quick Facts — Noncompete Agreement Lawyers (Texas)

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.

Frequently Asked Questions

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Business Contracts

Noncompete Agreement

California

Asked on May 21, 2023

Noncompete agreement time restrictions?

I am an entrepreneur who recently signed a Noncompete Agreement with a potential business partner, and I am looking to gain a better understanding of the time restrictions that are in place. I am concerned that the terms of the agreement may prevent me from pursuing other opportunities in the future and want to make sure I am aware of all the restrictions before making any decisions.

Gagandeep K.

Answered May 30, 2023

The non-compete agreement will likely specify the non-compete period/time restriction. If that is not obviously stated, you should consider having an attorney review the non-compete agreement. Typically, a non-compete agreement in a partnership or LLC places a geographic limitation for a certain time period such that the partner/member is prevented from carrying-on a similar business in a geographic area where the partnership/LLC has done and continues to do business. You can read more about non-compete agreements in California here: https://www.contractscounsel.com/t/us/noncompete-agreement/california.

Read 1 attorney answer>

Business

Noncompete Agreement

Florida

Asked on Jul 12, 2023

Noncompete agreement and business partners?

I am a business owner who has recently acquired a new partner. We are in the process of drafting a Noncompete Agreement to ensure that neither of us will compete against each other in the same market. We are looking for advice on what should be included in the agreement and how it should be enforced.

Daniel D.

Answered Aug 4, 2023

The one thing to make sure with noncompete agreements is that it is reasonable in terms of duration and the area you cannot compete in. Courts use a reasonableness test to determine whether a noncompete agreement is valid. If provisions are deemed to be unreasonable and fail the test, they could be altered or struck out of the agreement.

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Employee Rights

Noncompete Agreement

New York

Asked on Dec 5, 2024

Can my employer enforce a non-compete agreement I signed even though I was not provided any additional compensation or benefits in return?

I recently started a new job and was asked to sign a non-compete agreement as a condition of employment. However, I just found out from a colleague that my employer has been enforcing the non-compete agreement against former employees and preventing them from working in similar roles at competing companies. I am concerned because I was not given any additional compensation or benefits in exchange for signing the agreement, and I believe it may be unfair and potentially unenforceable. Can my employer legally enforce the non-compete agreement even though I did not receive any additional compensation or benefits in return?

Damien B.

Answered Dec 6, 2024

Hello! Generally, New York courts require that a non-compete agreement be supported by adequate consideration. If the agreement is signed at the beginning of employment, the job itself may serve as adequate consideration. However, if the non-compete is signed after employment begins, the employer may need to offer additional benefits, such as a raise or promotion, for the agreement to be enforceable. There are other defenses against enforcement. For a non-compete agreement to be enforceable, it must be reasonable in terms of duration, geographic scope, and the scope of activities it restricts. A court will evaluate whether the agreement is necessary to protect the employer’s legitimate business interests, such as confidential information or customer relationships. If not, a court could rule the noncompete is not enforceable.

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Employee Rights

Noncompete Agreement

Washington

Asked on Jan 19, 2025

Can my employer enforce a non-compete agreement if I was laid off due to COVID-19?

Can my former employer legally enforce the non-compete agreement I signed when I was hired, considering I was recently laid off due to the economic impact of COVID-19 and the agreement seems to restrict my ability to find new employment in my field? I have been actively seeking new job opportunities in the same industry, but potential employers are hesitant to hire me due to the non-compete agreement, which restricts me from working for competitors or starting my own business in the same field for a certain period of time. I want to understand if the non-compete agreement is still valid and enforceable given the circumstances of my layoff and the current job market conditions.

Merry K.

Answered Jan 28, 2025

I'm sorry, but your question is impossible to answer without reviewing your contract and knowing more about your type of job and compensation. Be aware that terms in such agreements are often found to be non-enforceable. You can start by reviewing the Washington State law on point: https://app.leg.wa.gov/rcw/default.aspx?cite=49.62&full=true

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Employment

Noncompete Agreement

Connecticut

Asked on Jun 3, 2023

Noncompete agreement and promotions?

I recently accepted a promotion within my company and was asked to sign a noncompete agreement. I am concerned that if I accept the promotion and then leave the company, that I will not be able to take a similar position with another company. I am also worried that if I don't accept the promotion, I may be at risk of being terminated. I need to know what my rights are and what the implications are of signing the noncompete agreement.

Thomas L.

Answered Jun 16, 2023

It depends on the terms of the non-compete and the size of your employer. Without seeing the agreement and knowing the size of your employer, I can't offer more advice.

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