Employment Agreements in Texas: What You Need to Know

Texas enforces non-compete agreements under the Texas Covenants Not to Compete Act — a more employee-unfavorable regime than California but one that does require courts to consider reasonableness. Understanding the specifics matters for anyone accepting an employment agreement in Texas.

The consideration requirement is your first analysis. Texas requires that a non-compete be "ancillary to or part of an otherwise enforceable agreement." In practice, this means the non-compete must be tied to something of value beyond just the job offer itself. Employers typically satisfy this by providing access to trade secrets or confidential information, specialized training, or other legitimate business-related consideration. If you're a senior hire receiving access to proprietary client data or technical systems, the consideration requirement is likely met. For lower-level roles with no genuine confidential information access, there may be a consideration argument.

Duration and scope matter — and courts can reform them. Texas courts look at whether the non-compete's duration, geographic scope, and restricted activities are "reasonable" given the employer's legitimate interest. What's reasonable depends on the facts: a two-year, national restriction for a software engineer who worked primarily in Dallas with no customer relationships is different from a two-year restriction for a senior sales executive who covered the entire Southwest. Importantly, Texas courts can reform an unreasonable non-compete — narrowing it to what's reasonable rather than voiding it entirely.

Geographic scope is frequently litigated. Texas courts examine whether the geographic scope corresponds to where you actually worked or had meaningful customer contact. A statewide restriction for someone who worked in Austin and had no customers outside Travis County is overbroad. A multi-state restriction for someone in a regional sales role with defined territory is more likely defensible. Understand the geographic scope in your agreement and whether it corresponds to your actual role.

Trade secret law is robust in Texas. Texas's Uniform Trade Secrets Act and the federal DTSA provide strong employer protections for confidential information. Even without a valid non-compete, taking confidential customer lists, pricing information, or proprietary technical data to a competitor creates significant legal exposure. The line between what you "know" and what constitutes a protectable trade secret requires careful analysis when transitioning employers.

If your employer seeks a temporary restraining order. Texas courts can grant injunctions to enforce non-competes while litigation is pending. If you join a competitor and your former employer seeks an injunction, you may be required to stop working in the restricted capacity while the case is pending — even before a final decision on the non-compete's enforceability. This practical reality makes understanding your specific agreement important before making a career move.