Are Non-Competes Enforceable in Texas? The §15.50 Test Explained
You have a new job offer, but you signed a non-compete at your last job. Or you run a business and want a clause a court will enforce. Either way, the question is the same: are non-competes enforceable in Texas? Some are, and the test is specific.
This post explains how Texas evaluates non-compete, non-solicitation and confidentiality agreements, for both workers and employers. It is written for workers, employers, recruiters and HR teams, because each side needs the same rules. It is legal information, not legal advice.
Non-Compete, Non-Solicitation and NDA: Three Different Covenants
These agreements usually come in three forms: the non-compete, the non-solicitation agreement and the NDA. Each is tested in its own way.
The guide starts by separating the three, because the test that applies depends on which one you are looking at. A document may contain more than one, so it helps to read each clause on its own.
Workers often find that a single employment agreement mixes several of these promises together. Separating them is the first step toward understanding which parts may matter most.
When Are Non-Competes Enforceable in Texas?
The Texas Covenants Not to Compete Act sets the framework. At its center is the five-part test under Business and Commerce Code 15.50.
Two related ideas come up again and again: the otherwise enforceable agreement, and the consideration a non-compete actually needs. The guide explains the test and both ideas in plain language.
Many workers assume that signing a non-compete settles the question. It does not, because the agreement still has to hold up under these rules. Understanding the test helps both sides judge an agreement before it becomes a dispute.
Reasonable Restraint: Time, Geography and Scope
Courts also look at whether the restraint is reasonable. The guide describes this as three rings, and each one limits how far a covenant can reach. The guide explains each ring and how it is measured.
Measuring a covenant against these three rings is one of the clearest ways to see where it may be too broad. Here are the three rings.
Time: how long the restriction lasts
Geography: where the restriction applies
Scope of activity: what kind of work it covers
Judicial Reformation: Why Texas Courts Rewrite Overbroad Covenants
Many people assume an overbroad non-compete is simply void. In Texas, courts often rewrite and enforce an overbroad covenant instead of voiding it. This is called judicial reformation.
That changes the picture for both sides. A worker cannot count on an overbroad clause disappearing, and an employer cannot count on it being enforced exactly as written.
For employers, this is a reason to draft carefully from the start. For workers, it is a reason not to assume the worst or the best about a clause without understanding how courts treat it.
Trade Secrets, Business Interests and the Enforcement Ladder
The guide covers protectable business interests and trade secrets under TUTSA, which often sit at the center of these disputes. For employers, identifying what actually needs protection is a useful place to start.
It also walks through the enforcement ladder and the remedies at each step. Knowing the steps helps both sides understand where a dispute stands and what may come next. Each step raises the stakes, and each one has its own remedies.
Many disputes never reach trial, and some end with a single letter. Understanding the ladder helps both sides see how a disagreement can escalate and where it might be resolved.
Cease-and-desist letter
Temporary restraining order (TRO)
Temporary injunction
Trial
Physician Non-Competes Under SB 1318 and New §15.501
A dedicated section covers physician non-competes under Texas SB 1318 and the rules for dentists, nurses and PAs under new §15.501. Healthcare workers and practices should read this part closely.
This part of the guide is especially relevant to practices that hire physicians or other clinicians, and to clinicians weighing a new position. It sits alongside the general framework explained above.
Every agreement is different, and this post cannot tell you whether yours will hold up. Talk with a licensed Texas attorney about your specific agreement. The guide gives workers, employers, recruiters and HR teams the full framework.
Frequently asked questions
Can a Texas court rewrite a non-compete?
Yes. Texas courts often use judicial reformation to rewrite and enforce an overbroad covenant instead of voiding it. That means an agreement that reaches too far may still be enforced in a narrower form. The guide explains how judicial reformation works and why it matters to both workers and employers. It also means the wording of the original agreement is only the starting point.
How long can a non-compete last in Texas?
There is no single answer that fits every agreement. Time is one of the three rings of reasonable restraint, along with geography and scope of activity. The guide explains how these limits work together, so you can see whether a covenant may reach too far. A licensed Texas attorney can review the specific terms.
Are physician non-competes different in Texas?
The guide includes a dedicated section on physician non-competes under Texas SB 1318, along with the rules for dentists, nurses and PAs under new §15.501. Healthcare workers and practices face rules beyond the general test, so it helps to understand this section before signing or enforcing an agreement. Healthcare employers benefit from the same review.
Get the full guide
Get The Texas Non-Compete & Non-Solicitation Guide from STACKED LEGAL to see how Texas tests these agreements from both sides. It is available in paperback and eBook. Read The Texas Non-Compete & Non-Solicitation Guide.
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Legal information, not legal advice. Laws change, and every situation is different. For advice about your situation, talk to a licensed Texas attorney.
