Are Non-Compete Agreements Enforceable in Texas?

Tyler employers often ask whether a non-compete will actually hold up. The short answer is yes, Texas enforces non-compete agreements, but only when they are drafted to meet the requirements of the Texas Covenants Not to Compete Act. A poorly written one can be narrowed by a court or thrown out entirely.

The Basic Texas Test

Under Texas Business and Commerce Code Section 15.50, a non-compete must be ancillary to or part of an otherwise enforceable agreement, and it must contain reasonable limits on time, geographic area and the scope of activity restrained. Those limits cannot be broader than needed to protect the employer’s legitimate business interests, such as goodwill or confidential information.

What Makes a Non-Compete Enforceable

• The employer gives something in return that ties to the restriction, such as access to confidential information or specialized training.
• The geographic area matches where the employee actually worked or had customer contact, like Smith County or the Tyler area, rather than the whole state.
• The time period is reasonable. One to two years is common for many roles.
• The restricted activity is limited to work that actually competes.

What Happens When a Non-Compete Is Too Broad

Texas courts can reform an overbroad non-compete to make it reasonable, but when that happens the employer may lose the right to recover money damages for violations that occurred before reformation. Drafting it correctly from the start matters.

Special Rules for Physicians and Health Care Workers

Texas imposes extra requirements on non-competes for physicians, including a buyout option and continued access to patient records, and the Legislature has added limits for other health care practitioners. Health care employers should have these agreements reviewed regularly. See our article on physician employment agreements.

Consider Other Protections Too

Non-solicitation and confidentiality agreements often protect a business more reliably than a broad non-compete. Many employers use all three together.

Frequently Asked Questions

Can a Texas employer make me sign a non-compete after I start working?

An employer can ask, but the agreement still needs consideration that supports it, such as access to confidential information, to be enforceable.

Are non-compete agreements legal in Tyler for hourly employees?

Texas law does not ban them by job type, but restrictions on lower-level employees who have no access to confidential information or customer goodwill are harder to enforce.

Talk With a Tyler Attorney

Need a non-compete drafted or reviewed? Learn about our employment law services for employers. Call Lindsey Birdsong, PC at (903) 595‑6297 or visit our contact page. Our office is at 2307 Dueling Oaks Drive, Suite 103, in Tyler.

This article is general information, not legal advice. Talk with an attorney about your specific situation.