Texas Non Compete Agreements: Scope of Restrictions
A non-compete agreement in Texas must not impose upon the employee greater restraints than are necessary to protect the business and goodwill of the employer. Moreover, the scope must bear some relationship to the activities of the employee. It is generally permissible to keep an employee from soliciting business from customers with whom he dealt during his employment, and it is likewise generally permissible to restrain the employee from competing in the geographic area in which he worked. Thus, an employee who works in Dallas might be prevented from post-employment competition in Dallas (but he might be able to complete in Houston). In terms of the appropriate length of the covenant, although covenants typically are 1-2 years in length, courts have upheld restrictions of 2-5 years in length (or longer in the context of a business purchase). In the event a covenant is too broad, the court will reform it so that it is reasonable.