Non-Competition Agreements in Texas

Non-competition agreements, also known as covenants not to compete or restrictive covenants, are employment contracts used by employers to limit the ability of an employee to compete with the employer by stealing customers or trade secrets. Enforceable agreements must strike a balance between protecting the employer's legitimate business interests from an unfair competitive advantage with the employee's right to work in a field for which he or she is trained.  In general, courts decide what is considered reasonable or not reasonable by examining the type and size of the business, how long and over what geographic area the restrictions apply and whether adequate consideration, or benefit, was given the employee at the time the agreement was signed.

The Law In Texas

Texas law allows non-competition agreements provided that they are part of or ancillary to an otherwise enforceable employment agreement.  The restrictions must be reasonable in terms of duration, geographic scope and the type of employment or line of business and must not impose a greater restraint than necessary to protect the goodwill or other business interest of the employer.  If the court finds an agreement is unreasonable, it may modify the agreement so that it does not unduly infringe on the former employee's ability to work.