Question 1

Does Texas enforce non-compete agreements?

Accepted Answer

Yes. Texas Business & Commerce Code § 15.50 allows non-competes IF they are "reasonable in scope, area, and time." Texas courts enforce reasonable non-competes. However, "reasonable" is key. A non-compete that restricts you from working in your industry statewide for 2 years might be enforceable; one that restricts nationwide for 5 years is likely too broad and unenforceable.

Question 2

What makes a non-compete "reasonable" in Texas?

Accepted Answer

Texas courts look at three factors: (1) Scope — is the restricted activity sufficiently related to company business? (2) Geography — is the restricted area reasonable given company operations? (3) Time — is the duration reasonable (typically 1-2 years is OK, 3+ years is risky)? Courts also examine whether there's a "legitimate protectable interest" — trade secrets, confidential info, goodwill, substantial relationships with prospective customers.

Question 3

What is a "legitimate protectable interest" in Texas?

Accepted Answer

Texas recognizes these legitimate interests: (1) Trade secrets or confidential information, (2) Substantial relationships with specific prospective or existing customers, (3) Unique or specialized training. If none of these apply, the non-compete is likely unreasonable. For example, a fast-food cashier non-compete is likely unenforceable; a software engineer non-compete is likely enforceable.

Question 4

If a non-compete is too broad, is it completely unenforceable?

Accepted Answer

Possibly. Texas has "blue pencil" doctrine — courts CAN narrow an overly broad non-compete to make it reasonable. But this varies by court. Better strategy: negotiate a reasonable non-compete upfront rather than hope a court will narrow yours. If you're sued and the non-compete is unreasonable, you have a strong defense.

Question 5

How should I negotiate a non-compete in Texas?

Accepted Answer

Push back on scope, geography, and time. Examples: "Instead of statewide, can we limit to our office location radius?" "Instead of 2 years, can we do 1 year?" "Can we exclude customers I don't work with?" Get specific. If the company can't articulate a "legitimate protectable interest," use that as leverage. Most Texas companies expect reasonable negotiation.

Non-Compete Clauses in Texas: When Are They Enforceable?

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