Below you’ll find answers to the 15 questions I get more than any other about Texas noncompete law. Each answer is short and to the point. For almost every question I have also provided a link to a related post that addresses the question in greater detail and with more nuance.
What is required for a covenant not to compete to be enforceable in Texas?
In Texas, a non-compete must have reasonable limitations, offer adequate consideration, and protect legitimate business interests to be enforceable.
How do I get out of a non-compete agreement in Texas?
To get out of a non-compete agreement in Texas, you may negotiate with your employer, prove that the terms are unreasonable or unenforceable, or show that it violates legal standards.
Do non-competes hold up in court in Texas?
Texas courts generally disfavor non-compete agreements but will enforce them if they are reasonable in scope, duration, geographic limitations, and protect legitimate business interests.
Can a company keep you from working for a competitor in Texas?
Yes, a company can prevent you from working for a competitor in Texas if you have signed a valid and enforceable non-compete agreement. Review the terms carefully and consult an attorney for any concerns.
Does a non-compete hold up if you are laid off in Texas?
In Texas, the enforceability of a non-compete does not change if you are laid off. Its validity depends on factors like consideration given, such as sharing of trade secrets, not just employment.
How serious is a non-compete agreement?
Non-compete agreements are legally binding in Texas and can have significant career implications. Violating these agreements can lead to legal consequences, including injunctions and damages.
What happens if you break or violate a non-compete in Texas?
Breaking a non-compete in Texas can result in legal action against you, such as injunctions preventing further violations and potential damages for losses caused to the employer.
Can an independent contractor be held to a non-compete in Texas?
Yes, in Texas, an independent contractor can be bound by a non-compete if it meets the standard legal requirements for enforceability.
Can you have a non-compete agreement with no geographic limitations in Texas?
A non-compete agreement in Texas must have reasonable geographic limitations to be enforceable. Agreements without any geographic limit are likely to be considered unreasonable.
Will non-compete agreements be banned in 2024?
As of now, there is no legislation in Texas indicating that non-compete agreements will be banned in 2024.
What voids/nullifies/invalidates a non-compete agreement in Texas?
A non-compete in Texas is void if it has unreasonable terms, lacks adequate consideration, or doesn’t protect legitimate business interests.
How long can a non-compete be in Texas?
The duration of a non-compete in Texas should be reasonable. Typically, a period of up to 2 years is considered reasonable, depending on the circumstances.
What is good consideration for a Texas non-compete?
Good consideration for a Texas non-compete includes benefits like access to trade secrets, specialized training, or confidential information, beyond mere employment.
What is the Covenant Not to Compete Act in Texas?
The Covenant Not to Compete Act in Texas sets legal standards for enforceable non-competes, including reasonable limitations on time, geography, and scope.