Texas Non-Compete Agreement Template
Reviewed by the Agiled editorial teamUpdated June 2026
Non-compete law is the most state-divergent area in employment contracting — four states ban these agreements outright, a dozen more impose salary floors or notice rules, and the rest apply judge-made reasonableness tests that differ in temperament. This page covers what Texas requires; the download is our standard non-compete template, to be scoped to Texas's rules below.
Texas non-compete rules at a glance
| Enforceability | Enforceable under the Covenants Not to Compete Act (Tex. Bus. & Com. Code §15.50) if ancillary to an otherwise enforceable agreement. |
|---|---|
| Protected workers / thresholds | Physicians: statutory buyout right and 2024–25 reform proposals |
| Required formalities | The employer must give consideration that 'gives rise to' the interest restrained — typically confidential information or specialized training actually delivered |
| Overbroad agreements | Reformation required: courts must rewrite overbroad terms (but damages become unavailable for the reformed period) |
State laws change frequently and this summary is not legal advice. Verify current rules against the state statute or with a licensed attorney before relying on them.
How Texas handles non-compete agreements
Texas enforcement turns on the consideration loop: promise confidential information, actually deliver it, and the restraint stands; skip the delivery and the clause was never enforceable at all. The practical drafting rule for Texas: enforceable under the Covenants Not to Compete Act (Tex. Bus. & Com. Code §15.50) if ancillary to an otherwise enforceable agreement.. Before using this template, confirm the current statute — non-compete law has changed in more than a dozen states since 2020, and the FTC's federal ban attempt keeps the area moving.
Texas non-compete agreement FAQs
Are non-compete agreements enforceable in Texas?
Enforceable under the Covenants Not to Compete Act (Tex. Bus. & Com. Code §15.50) if ancillary to an otherwise enforceable agreement. Coverage limits matter here: physicians: statutory buyout right and 2024–25 reform proposals.
What happens to an overbroad non-compete in Texas?
Reformation required: courts must rewrite overbroad terms (but damages become unavailable for the reformed period) Draft to the narrowest restriction that protects the actual business interest — the safety net (or lack of one) above is what you're betting on.
What formalities does a Texas non-compete require?
The employer must give consideration that 'gives rise to' the interest restrained — typically confidential information or specialized training actually delivered Procedural failures are now the most common way non-competes die — more common than substantive overbreadth in states with notice rules.
Does the FTC non-compete ban apply in Texas?
The FTC's 2024 rule banning most non-competes was set aside by a federal court before taking effect and remains in litigation, so it is not currently in force in Texas or any state. State law controls — which is why the state-specific rules above are the ones to draft around.
The full non-compete agreement guide
Clause-by-clause guidance, common mistakes, and the complete template text live on the main page: Non-Compete Agreement Template — full guide and download.