Texas Non-Compete Agreement: When It Is Enforceable, What a Court Can Change, and What Applies to Health Care Workers

A Texas non-compete agreement is not automatically void, and it is not automatically enforceable just because someone signed it. Under Texas Business and Commerce Code Section 15.50 (opens in a new tab) (checked October 1, 2026), a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement when that agreement is made, and if its limits on time, geographic area and scope of activity are reasonable and no greater than necessary to protect the employer's goodwill or other business interest. When those limits go too far, Section 15.51 directs a court to reform the covenant rather than throw it out, with limits on what the employer can recover. Physicians, dentists, nurses and physician assistants have additional statutory rules.

What a Texas non-compete agreement restricts

A non-compete is a contract clause that limits what a worker can do after the job ends. It may bar working for a competitor, starting a competing business, or doing the same type of work within a set area for a set period. TexasLawHelp.org's page on employment contracts in Texas (opens in a new tab) explains that employment contracts may also contain confidentiality and non-solicitation provisions, and that these provisions should be reviewed carefully.

Those three clauses do different jobs. A confidentiality agreement protects specified confidential information or trade secrets. A non-solicitation clause restricts reaching out to, or recruiting, the employer's customers or employees. A non-compete restricts competing work or professional mobility. A single employment agreement often contains all three, so the first useful step is finding out which ones are actually in your document.

Signing does not settle whether the covenant can be enforced

Texas law looks at what the covenant says and what it is attached to. Section 15.50 sets the criteria, and Section 15.51 (opens in a new tab) sets the procedures and remedies. Section 15.52 states that these criteria, procedures and remedies are exclusive and preempt other law, including common law, on those subjects.

Who has to prove the criteria also matters. Section 15.51(b) assigns that burden based on the agreement's primary purpose. When the agreement is primarily for personal services, such as an ordinary employment agreement, the employer seeking enforcement generally bears the burden of establishing the Section 15.50 criteria.

What "ancillary to an otherwise enforceable agreement" means

The covenant has to be connected to a real, enforceable agreement, and the employer's interest it protects has to relate to what the employer gave or promised.

The Texas Supreme Court's reading has shifted over time. Light v. Centel Cellular Co. of Texas (1994) set an earlier, more restrictive approach. In Alex Sheshunoff Management Services, L.P. v. Johnson (opens in a new tab) (2006), the Court held that an unperformed promise, such as an employer's promise to provide confidential information, can support a covenant if the employer later performs that promise. In Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding (opens in a new tab) (2009), the Court held that an employer may impliedly promise confidential information when the nature of the job requires it. And in Marsh USA Inc. v. Cook (opens in a new tab) (2011), the Court held that consideration reasonably related to an interest such as trade secrets, confidential information or goodwill can satisfy the statute; that case involved stock options.

Texas law does not require a separate cash payment for every non-compete, since promises involving confidential information, training or goodwill can qualify. At the same time, the opinions do not make any particular promise an automatic guarantee that a particular covenant is enforceable.

How time, geography and scope limit the covenant

For most Texas workers, Section 15.50(a) does not name a fixed number of months or miles. Instead, it requires that the restriction on time, geographical area and scope of activity be reasonable and no greater than necessary to protect the employer's goodwill or other business interest.

That is why the wording of the clause matters so much. Defined terms such as "competitive business," "restricted territory," "customers" and "confidential information" decide how far the restriction actually reaches.

Confidentiality and non-solicitation clauses

Labels do not control how a Texas court treats a clause. In Marsh, the Texas Supreme Court described restraints that limit a former employee's professional mobility, or that restrict soliciting a former employer's customers and employees, as governed by the Covenants Not to Compete Act.

So, a customer non-solicitation clause may fall under the same statute as a non-compete, depending on its wording and effect. A pure confidentiality provision protects information rather than limiting where someone can work.

What a Texas court can do with an overbroad covenant

Texas does not treat an overbroad covenant as all or nothing. Under Section 15.51(c) (opens in a new tab), when a covenant is ancillary to or part of an otherwise enforceable agreement but its time, geographic or activity limits are unreasonable and greater than necessary, "the court shall reform the covenant" so the limits become reasonable, and then enforce it as reformed.

Section 15.51(c) also bars an award of damages for a breach that happened before reformation; relief for that period is limited to injunctive relief. There is also a fee rule for workers. If the agreement is primarily for personal services, and the worker proves that the employer knew at signing that the limits were unreasonable and greater than necessary, and then sought to enforce them beyond what was necessary, the court may award the worker costs, including reasonable attorney's fees, actually and reasonably incurred in defending the case.

Remedies and the Texas injunction process

Under Section 15.51(a), a court may award damages, injunctive relief or both for a breach, subject to the reformation limits in Section 15.51(c). The court is chosen under jurisdiction and venue rules and any enforceable forum-selection clause in the contract.

The Texas Rules of Civil Procedure (opens in a new tab) govern that process. Rule 680 allows a temporary restraining order without notice only on specific facts showing immediate and irreparable injury before notice and a hearing can happen. Such an order generally expires within a period the court sets, not more than 14 days, unless extended under the rule, and it must set a hearing on the temporary or permanent injunction. Rules 681 to 684 add notice, a verified petition, a detailed order and a bond for a temporary injunction.

The district or county clerk handles filing in the chosen court, and the judge runs the restraining-order and injunction hearings. If you receive court papers or a hearing date, keep every document and note each date, since the Rule 680 timeline is short. Our page on what to do if you are served with a lawsuit explains the general response steps, and our guide to what a demand letter is covers the letters that often come first.

Rules for physicians

Section 15.50(b) adds requirements for a covenant that restricts a licensed physician's practice of medicine. Before the 2025 amendments, the statute required the covenant to:

• Preserve the physician's access to a list of patients seen or treated within one year before termination.
• Provide access to medical records, with patient authorization, and copies for a reasonable fee set by the Texas Medical Board.
• Provide a buyout no greater than the physician's total annual salary and wages at termination.
• Permit continuing care and treatment of a specific patient during an acute illness.
• Expire no later than one year after termination.
• Limit the geographic area to no more than a five-mile radius from the location where the physician primarily practiced.

Senate Bill 1318 (opens in a new tab) of the 89th Legislature amended Section 15.50 and also states that the practice of medicine does not include managing or directing medical services in an administrative capacity.

What changed for other health care workers in 2025

SB 1318 added Section 15.501, which covers dentists licensed by the Texas State Board of Dental Examiners, professional or vocational nurses licensed under Occupations Code Chapter 301, and physician assistants licensed under Occupations Code Chapter 204. For these practitioners, the covenant must provide a buyout no greater than total annual salary and wages at termination, expire no later than one year after termination, and cover no more than a five-mile radius.

The effective date controls which rules apply. SB 1318 took effect September 1, 2025, and applies only to covenants entered into or renewed on or after that date. A covenant signed or renewed before then remains governed by the law in effect when it was signed or renewed. That makes the signing date, and any renewal or amendment date, one of the first facts to locate in a health care contract.

The FTC rule and Texas law

The Federal Trade Commission published its Non-Compete Clause Rule (opens in a new tab) in 2024. The FTC's rule page (opens in a new tab) now states that the rule is "not in effect and it is not enforceable." According to the FTC, a federal district court blocked enforcement on August 20, 2024, the FTC appealed on October 18, 2024, and on September 5, 2025 it moved to dismiss its Fifth Circuit appeal. The FTC's September 2025 announcement (opens in a new tab) states that the Commission voted to dismiss its appeals and accede to vacatur of the rule. For a Texas covenant, Chapter 15 of the Business and Commerce Code supplies the governing criteria.

Reading the contract you signed or were offered

Before deciding anything, it helps to collect the facts a lawyer or court would look at first:

• The exact clause restricting competition, work, customers, employees or information, plus its defined terms.
• The stated duration, territory and restricted activity.
• The related promise, such as access to confidential information, training, goodwill or stock options.
• The date the agreement was signed, and any renewal or amendment date.
• The governing-law clause, which names the state whose law applies.
• The forum-selection clause, which names the court or location for disputes, and any arbitration provision.
• Separate confidentiality, trade-secret and non-solicitation provisions.
• Your role and, in health care, your license category.

If you plan to open a competing company, the formation steps are in our guide on how to start an LLC in Texas, though forming an entity does not change what a signed covenant says. If a dispute turns on whether a promise was broken, our page on what breach of contract means covers the basic elements. Applying any of these rules to a specific contract is work for a qualified Texas lawyer or a court.

How Texas compares with California and Florida

Non-compete law varies sharply by state, so a rule from one state should not be assumed in another. In California, Business and Professions Code Section 16600 (opens in a new tab) provides that, subject to statutory exceptions, every contract restraining anyone from engaging in a lawful profession, trade or business is void to that extent. In Florida, Florida Statutes Section 542.335 (opens in a new tab) allows enforcement of restrictive covenants that are reasonable in time, area and line of business and requires a signed writing and proof of a legitimate business interest.

Where to find information or legal help in Texas

Several Texas resources explain the law or connect people with lawyers. TexasLawHelp.org offers general information on employment contracts, including a Spanish version, Contratos de trabajo en Texas (opens in a new tab). The Texas State Law Library's Ask a Librarian service (opens in a new tab) provides legal information and research help at no cost, although phone message and data rates may apply; its librarians are not lawyers and can refer you to lawyer-referral and legal-aid resources (opens in a new tab).

The State Bar of Texas Lawyer Referral and Information Service (opens in a new tab) offers an initial consultation of up to 30 minutes for no more than $20, as of October 1, 2026; after that, the lawyer and client negotiate fees. For more on how lawyers bill, see our guide on how much a lawyer costs. If you read Spanish more comfortably, you can use the English statute text alongside a qualified bilingual lawyer or interpreter who can explain the contract.

Frequently asked questions about Texas non-competes

Short answers to common follow-up questions.

Does a Texas non-compete need a separate payment to be valid?

No single cash payment is required by Section 15.50. The Texas Supreme Court has recognized that promises tied to confidential information, specialized training, goodwill or stock options can support a covenant, as discussed in Marsh USA Inc. v. Cook (opens in a new tab).

Can an employer recover money for a breach that happened before a court rewrote the clause?

Not under Section 15.51(c) (opens in a new tab). When a court reforms an overbroad covenant, it may not award damages for a breach before reformation, and relief for that period is limited to an injunction.

Do the 2025 health care rules apply to a contract signed in 2024?

Generally not. SB 1318 (opens in a new tab) applies to covenants entered into or renewed on or after September 1, 2025, so the renewal date of an older agreement matters as much as the original signing date.

How long does a Texas temporary restraining order last?

Under Texas Rule of Civil Procedure 680 (opens in a new tab), an order granted without notice generally expires within a period the court sets, not exceeding 14 days, unless extended under the rule. The order must also set a hearing on the temporary or permanent injunction.

A next step for your contract

If you have a non-compete to review, a letter from a former employer, or an agreement to draft, a Texas lawyer who handles employment or business contracts can read the actual document against Chapter 15. You can search the Counselado law firm directory to find Texas firms that handle employment and contract matters near you.