Non-Compete Agreement Template for Texas
Create an enforceable non-compete agreement under Texas law. Texas enforces non-competes when ancillary to an otherwise enforceable agreement, with courts willing to reform overly broad provisions.
AI-generated draft for review. Not legal advice. Starting at $19.
Legal Requirements in Texas
Must be ancillary to an otherwise enforceable agreement (Texas Business & Commerce Code § 15.50)
Must contain reasonable limitations on time, geographic area, and scope of activity
Must be supported by adequate consideration (confidential information, specialized training, etc.)
The agreement to which the non-compete is ancillary must be independently enforceable
Key Statutes & Regulations
- Texas Business & Commerce Code § 15.50-15.52
- Marsh USA Inc. v. Cook (2011) — Texas Supreme Court
- Defend Trade Secrets Act (DTSA), 18 U.S.C. §§ 1836-1839
Common Pitfalls
- •Creating a standalone non-compete without tying it to an enforceable agreement (NDA, employment agreement)
- •Not providing adequate consideration beyond at-will employment
- •Setting geographic restrictions broader than the employee actual territory
- •Not defining the restricted activities with specificity
Local Terminology
- Ancillary Agreement
- The otherwise enforceable agreement to which the non-compete must be attached
- Reformation
- Texas courts will narrow overly broad non-competes to make them enforceable
- Consideration
- Confidential information, training, or other value provided in exchange for the restriction
How Texas Differs
Texas is moderately enforcement-friendly — courts will reform overly broad non-competes rather than void them
The "ancillary to an otherwise enforceable agreement" requirement is unique to Texas
Texas courts apply a two-year presumption of reasonableness for time restrictions
Providing confidential information or specialized training satisfies the consideration requirement
Frequently Asked Questions
Are non-competes enforceable in Texas?
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Yes, when they meet specific requirements. Under § 15.50, a non-compete must be (1) ancillary to an otherwise enforceable agreement, (2) contain reasonable time, geographic, and scope limitations, and (3) be supported by consideration. Texas courts will reform overly broad provisions rather than voiding the entire agreement.
What makes a Texas non-compete "ancillary to an otherwise enforceable agreement"?
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The non-compete must be part of a broader agreement that is independently enforceable — typically an employment agreement, NDA, or stock option agreement. The consideration in that agreement (such as access to confidential information or specialized training) must give rise to the employer interest in restraining competition.
How long can a Texas non-compete last?
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Texas courts generally consider 1-2 years as reasonable for non-compete periods. Longer periods may be reformed down to a reasonable duration. The reasonableness depends on the industry, the employee role, and the nature of the protected interests.
Will Texas courts fix an overly broad non-compete?
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Yes. Texas courts have the power to reform non-compete agreements that are broader than necessary. They can narrow the time period, geographic scope, or activity restrictions to make them reasonable and enforceable. This is more favorable to employers than states where courts void the entire clause.
Available in Other Jurisdictions
Related Contract Types
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