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Parties and cover-term identification
Work through every item the way a Texas court would: one statute — the Covenants Not to Compete Act — supplies the only test, ties every restraint to a protectable business interest, and orders courts to trim overbroad covenants instead of voiding them, at the price of the employer's damages claim. For the question-by-question legal analysis behind these items, see the Texas non-compete practice note.
Confirm the named employer is the entity that owns the goodwill or confidential information the covenant claims to protect. Texas ties every restraint to the promisee's own business interest, and in a personal-services agreement that same entity carries the burden of proving the covenant fits the statute — a covenant running to a parent or affiliate with no protectable interest of its own starts the analysis in a hole.
In Texas the signing date does not finish the timeline. The statute asks whether the covenant was ancillary to an otherwise enforceable agreement at the time the agreement was made, and an at-will covenant resting on an employer promise binds only once the employer performs — so the dates that matter are when the agreement was made and when the promised consideration actually arrived.
The title routes the agreement to the right statutory track. A physician is reviewed under the physician-specific conditions of section 15.50(b); a dentist, professional or vocational nurse, or physician assistant triggers the parallel section 15.501 regime; everyone else is judged under the general reasonableness test. Misreading the role means reviewing against the wrong statute.
Check that the governing state is named — and weigh any clause selecting another state's law with care. Texas treats non-compete enforcement as fundamental policy, and its supreme court has applied Texas law to strike a covenant despite the parties' contrary contractual choice.
Sources for this answer
Case law · 2006-10-20
A.1 Alex Sheshunoff Management Services, L.P. v. JohnsonSheshunoff supports that an at-will covenant that is illusory at signing becomes enforceable once the employer performs by providing the promised consideration, creating a binding unilateral contract.
The fact that the employer was not bound to perform because he could have fired the employee is irrelevant; if he has performed, he has accepted the employee's offer and created a binding unilateral contract.
See Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006).
Primary law
A.2 Tex. Bus. & Com. Code § 15.501Tex. Bus. & Com. Code § 15.501(a) supports that the health care practitioners covered by the section are licensed dentists, persons licensed to engage in professional or vocational nursing, and licensed physician assistants.
(1) a person licensed by the State Board of Dental Examiners to practice dentistry in this state; (2) a person licensed under Chapter 301 , Occupations Code, to engage in professional or vocational nursing; or (3) a physician assistant licensed under Chapter 204 , Occupations Code.
See Tex. Bus. & Com. Code § 15.501(a).
Case law · 1990-06-06
A.3 DeSantis v. Wackenhut Corp.DeSantis v. Wackenhut supports that Texas treats non-compete enforcement as fundamental policy and will apply Texas law rather than the contractually chosen law where the chosen law would offend that policy.
We hold that Texas law, not Florida law, applies in this case, and that under Texas law, the noncompetition agreement is unenforceable.
See DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990).
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Definitions
Match the definition to what the employer actually provides. Promised and delivered confidential information is the classic consideration supporting a Texas covenant — implied where the job cannot be done without it — so a definition describing categories the worker genuinely receives does double duty as a confidentiality term and as formation evidence.
Keep Trade Secrets separate from ordinary confidential information. The Texas trade-secret statute supplies injunctive relief independent of any covenant, but only for genuine secrets — it expressly leaves the worker's general knowledge, skill, and experience untouched — so the definition should describe protectable material rather than everything the worker learned on the job.
One defined Restricted Period keeps every duration auditable against the statutory yardstick: the time limit must be reasonable and impose no greater restraint than necessary to protect the employer's interest. Texas publishes no numeric ceiling for ordinary workers, so the period has to be justified by the interest it protects — and a one-year statutory ceiling applies where the worker is a covered physician or health-care practitioner.
Tie the geography to where the employee actually worked or where the employer genuinely competes. The Act requires the geographic limit to be reasonable and no broader than the interest it protects, and an everywhere-the-company-operates territory is the classic reformation trigger — with the damages forfeit that follows.
Bound the class to customers the worker actually served during a stated look-back window. Texas courts run customer non-solicits through the same Act and the same reasonableness test as non-competes, so an entire-book-of-business definition gets judged as a restraint on competition, not as a softer alternative to one.
Keep the no-poach class to colleagues the departing worker actually worked with or supervised during the look-back window. The Texas authorities collected here do not separately address employee non-solicits, so the safest reading is that an overbuilt clause invites the same reasonableness scrutiny as the rest of the covenant suite; a modest, relationship-based class avoids testing the question.
Name the interests in the statute's own vocabulary: goodwill or another business interest of the promisee is what the Act protects, and the Texas Supreme Court has accepted consideration as adequate precisely because it was reasonably related to goodwill. A recital mapping the claimed interests to the consideration given makes both halves of the statutory test easier to carry.
Describe the competing activity concretely — the products, services, or line of business the worker actually touched. Scope of activity is one of the three statutory axes, and a definition reaching anything the employer might someday do imposes a greater restraint than necessary on its face.
Where the covenant restricts owning or investing in competitors, look for a passive-holdings carve-out below a stated percentage. A clause that technically forbids index funds and ordinary public shares restrains far more than any goodwill interest requires — gratuitous overbreadth in a state whose courts must trim whatever they find unreasonable, at the employer's cost.
A drafting convenience rather than a legal requirement — many agreements inline the carve-out language instead of defining a capitalized term. If the term appears, confirm its percentage matches the operative carve-out it supports.
Pin down whether the term covers only initiated contact or also responding to inquiries that arrive unprompted. The wider reading expands the scope of activity restrained, and in Texas every expansion has to answer to the no-greater-restraint-than-necessary standard.
Verify the trigger treats resignation, dismissal, and expiration of a fixed term consistently. Texas clocks run from this event — including the physician buyout, which is priced at the worker's total annual salary and wages at the time of termination — so an ambiguous trigger leaves both the restricted period and the buyout number contestable.
Sources for this answer
Case law · 2009-04-17
B.1 Mann Frankfort Stein & Lipp Advisors, Inc. v. FieldingMann Frankfort supports that where the nature of the work requires confidential information, the employer's promise to provide it can be implied, supplying the consideration that makes the covenant enforceable.
When the nature of the work the employee is hired to perform requires confidential information to be provided for the work to be performed by the employee, the employer impliedly promises confidential information will be provided.
See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009).
Primary law
B.2 Tex. Civ. Prac. & Rem. Code § 134A.003Tex. Civ. Prac. & Rem. Code § 134A.003 supports that, under the Texas Uniform Trade Secrets Act, actual or threatened misappropriation may be enjoined, but the order may not prohibit using general knowledge, skill, and experience acquired during employment.
Actual or threatened misappropriation may be enjoined if the order does not prohibit a person from using general knowledge, skill, and experience that person acquired during employment.
See Tex. Civ. Prac. & Rem. Code § 134A.003.
Primary law
B.3 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(a) supports that a covenant's time, geographic, and scope limits must be reasonable and no greater than necessary to protect the promisee's goodwill or other business interest.
a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.
See Tex. Bus. & Com. Code § 15.50(a).
Case law · 2011-12-16
B.4 Marsh USA Inc. v. CookMarsh USA v. Cook supports that the consideration for a Texas non-compete need only be reasonably related to a business interest the Act protects, such as goodwill, with stock options qualifying.
We hold that, under the terms of the Covenants Not to Compete Act (Act), the consideration for the noncompete agreement (stock options) is reasonably related to the company's interest in protecting its goodwill, a business interest the Act recognizes as worthy of protection.
See Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011).
Primary law
B.5 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(b) supports that a physician non-compete must provide for a buyout in an amount no greater than the physician's total annual salary and wages at the time of termination.
the covenant must provide for a buyout of the covenant by the physician in an amount that is not greater than the physician's total annual salary and wages at the time of termination of the contract or employment;
See Tex. Bus. & Com. Code § 15.50(b)(2).
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Timing and execution acknowledgements
Texas formation is a performance story, so the acknowledgement should record more than a date: what consideration was promised, when it was delivered, and that the covenant accompanied an otherwise enforceable agreement when made. An at-will covenant is illusory until the employer performs, and an implied promise of confidential information fills the gap only where the job requires it — contemporaneous recitals beat reconstructing that timeline in litigation.
No Texas statute demands it for ordinary workers, but it is cheap procedural-fairness evidence — and for physician and practitioner covenants, whose terms must be clearly and conspicuously stated, a counsel acknowledgement reinforces that the statutory conditions were genuinely surfaced rather than buried.
Sources for this answer
Case law · 2006-10-20
C.1 Alex Sheshunoff Management Services, L.P. v. JohnsonSheshunoff supports that an at-will covenant becomes enforceable on the employer's performance of the promised consideration, which is why the acknowledgement should document what was promised and when it was delivered.
The fact that the employer was not bound to perform because he could have fired the employee is irrelevant; if he has performed, he has accepted the employee's offer and created a binding unilateral contract.
See Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006).
Case law · 2009-04-17
C.2 Mann Frankfort Stein & Lipp Advisors, Inc. v. FieldingMann Frankfort supports that an implied promise of confidential information arises only where the nature of the work requires it, leaving express recitals as the safer formation evidence.
When the nature of the work the employee is hired to perform requires confidential information to be provided for the work to be performed by the employee, the employer impliedly promises confidential information will be provided.
See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009).
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Confidentiality and trade-secret treatment
Trade-secret obligations should last as long as secrecy does — that is how federal law defines the right, and Texas trade-secret remedies assume it. A fixed expiry on trade-secret protection hands back the strongest covenant-independent protection the employer has in this state.
Give ordinary confidential information its own finite term. Beyond the usual reasonableness concern, Texas adds a recharacterization risk: a confidentiality clause broad enough to keep the worker from functioning in the field can be treated as a non-compete and tested under the Act, reformation and all. A two-track structure — perpetual for secrets, finite for the rest — stays clear of that line.
Sources for this answer
Primary law
D.1 Defend Trade Secrets Act — definition of a trade secret, 18 U.S.C. § 1839Federal law keys trade-secret status to continued secrecy, which is why contractual trade-secret protection should run as long as secrecy does rather than to a fixed date.
the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information
See 18 U.S.C. § 1839(3)(B) (2018).
Primary law
D.2 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(a) supports that a confidentiality clause broad enough to function as a non-compete would be judged under the Act's ancillary-and-reasonableness test rather than escaping it.
a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.
See Tex. Bus. & Com. Code § 15.50(a).
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Permitted disclosures and protected conduct
Federal law, fully applicable in Texas: omit the immunity notice and the employer forfeits exemplary damages and attorney fees in a later trade-secret suit against the worker. Texas employers lean on trade-secret claims to backstop covenants — and as the only dependable fee path — so the notice protects remedies that matter here.
Confidentiality and non-disparagement language must leave wages, hours, and working conditions discussable. Federal labor law protects that speech no matter which state's law governs the agreement, and the Board has been striking overbroad terms in employee agreements.
Confirm the carve-out for disclosure required by law, court order, or a government investigation, with notice to the employer where lawful. No confidentiality clause can outrun a subpoena, and the carve-out keeps the worker from being contractually penalized for complying.
Sources for this answer
Primary law
E.1 Defend Trade Secrets Act — employer immunity-notice requirement, 18 U.S.C. § 1833(b)The DTSA requires an employer to give notice of the trade-secret whistleblower immunity in any agreement governing the use of trade secrets or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A) (2018).
Primary law
E.2 NLRA Section 7 — protected concerted activity, 29 U.S.C. § 157Section 7 protects concerted activity including wage discussion — the statutory basis for the carve-out from confidentiality and non-disparagement restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection
See 29 U.S.C. § 157 (NLRA § 7).
Agency guidance · 2023-02-21
E.3 NLRB news release on McLaren Macomb, 372 NLRB No. 58 (2023)The NLRB held that offering severance terms that broadly waive Section 7 rights — including overbroad confidentiality and non-disparagement terms — violates the NLRA.
simply offering employees a severance agreement that requires them to broadly give up their rights under Section 7 of the Act violates Section 8(a)(1) of the Act.
See McLaren Macomb, 372 NLRB No. 58 (2023); NLRB Office of Public Affairs (Feb. 21, 2023).
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Property return and certification
Return-or-delete at separation, certified in writing. In a state where the trade-secret statute is the employer's strongest covenant-independent tool, the certification is the cleanest contemporaneous evidence if protected material later surfaces at a competitor.
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Restrictive covenants (each independently includable)
Optional, and the least regulated covenant in the Texas suite — the authorities here say nothing specific about restraints on recruiting former colleagues. Keep it inside the Covered Employees class and the Restricted Period, and do not let it grow into a hiring ban that tests how far the Act's reasonableness scrutiny extends.
Optional — but not a loophole. Texas courts analyze customer non-solicits under the Covenants Not to Compete Act and the same reasonableness test, so the clause needs the same ancillary footing and the same tailoring to actual customer relationships as a full non-compete.
Non-dealing bars serving covered customers even when they arrive unsolicited — a wider restraint on the same relationships a non-solicit covers. Treat the extra width as something the employer must justify under the no-greater-restraint standard, not as boilerplate.
Optional, and in Texas reviewable on two axes at once: the covenant must ride an otherwise enforceable agreement with qualifying consideration, and its time, geography, and scope must each be no broader than the protected interest. In a personal-services agreement the employer bears the burden of proving both. Route the clause through the Texas statutory gates at the end of this checklist before evaluating any of its terms.
When the employer can name its real competitors, the covenant should bind those instead of leaning on the open-ended Competitive Business definition. A named list is strong evidence the restraint is no greater than necessary — the exact phrase the statute tests against — and it shrinks the surface a court would otherwise have to reform.
Rare and deliberate. Confirm the passive-holdings carve-out is intact and the clause shares the defined Restricted Period; an investment ban with no carve-out restrains conduct far from any goodwill interest and widens the reformation target.
Sources for this answer
Primary law
G.1 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(a) supports that every covenant under the Act, including customer non-solicits, must be ancillary to an otherwise enforceable agreement and reasonably limited in time, geography, and scope.
a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.
See Tex. Bus. & Com. Code § 15.50(a).
Primary law
G.2 Tex. Bus. & Com. Code § 15.51Tex. Bus. & Com. Code § 15.51(b) supports that when the agreement's primary purpose is to obligate the worker to render personal services, the employer bears the burden of establishing the covenant meets the § 15.50 criteria.
If the primary purpose of the agreement to which the covenant is ancillary is to obligate the promisor to render personal services, for a term or at will, the promisee has the burden of establishing that the covenant meets the criteria specified by Section 15.50 of this code.
See Tex. Bus. & Com. Code § 15.51(b).
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Non-disparagement
Standard to include with a stated term, but audit the carve-outs: truthful testimony, statements to government agencies, and protected workplace speech must sit outside the clause. Federal labor law polices overbroad versions regardless of the governing state.
Sources for this answer
Agency guidance · 2023-02-21
H.1 NLRB news release on McLaren Macomb, 372 NLRB No. 58 (2023)The NLRB held that severance terms broadly waiving Section 7 rights — including overbroad non-disparagement provisions — violate the NLRA.
simply offering employees a severance agreement that requires them to broadly give up their rights under Section 7 of the Act violates Section 8(a)(1) of the Act.
See McLaren Macomb, 372 NLRB No. 58 (2023); NLRB Office of Public Affairs (Feb. 21, 2023).
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Physician-specific notices and carve-outs
The dedicated clause earns its place in Texas: a physician covenant carries statutory conditions including patient-list access, medical-record access, continuity-of-care protection, and a buyout capped at the physician's total annual salary and wages, and since September 1, 2025 dentists, nurses, and physician assistants have their own buyout-and-limits regime under section 15.501. The clause should either implement those conditions or state plainly that the agreement is not to be used for covered practitioners — the detailed gates sit at the end of this checklist.
Sources for this answer
Primary law
I.1 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(b) supports that a physician non-compete must provide for a buyout in an amount no greater than the physician's total annual salary and wages at the time of termination.
the covenant must provide for a buyout of the covenant by the physician in an amount that is not greater than the physician's total annual salary and wages at the time of termination of the contract or employment;
See Tex. Bus. & Com. Code § 15.50(b)(2).
Primary law
I.2 Tex. Bus. & Com. Code § 15.501Tex. Bus. & Com. Code § 15.501, added by SB 1318 (2025), supports that a non-compete is unenforceable against a dentist, nurse, or physician assistant unless it provides a salary-capped buyout, expires within one year, is limited to a five-mile radius, and is clearly and conspicuously stated in writing.
A covenant not to compete relating to the practice of dentistry or nursing, or practice as a physician assistant, as applicable, is not enforceable against a health care practitioner unless the covenant: (1) provides for a buyout of the covenant by the health care practitioner in an amount that is not greater than the practitioner's total annual salary and wages at the time of termination of the practitioner's contract or employment; (2) expires not later than the one-year anniversary of the date the contract or employment has been terminated; (3) limits the geographical area subject to the covenant to no more than a five-mile radius from the location at which the health care practitioner primarily practiced before the contract or employment terminated; and (4) has terms and conditions that are clearly and conspicuously stated in writing.
See Tex. Bus. & Com. Code § 15.501(b).
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No conflicting obligations
The worker's representation that no earlier agreement blocks the new role. Texas enforces reasonable covenants, so incoming hires genuinely may carry live restraints; surfacing them at signing protects the employer from tortious-interference exposure and tells the reviewer which side of an enforcement fight the company may end up on.
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Notice to future employers and other third parties
A genuine drafting choice. A notice letter can support enforcement, but it is also where over-enforcement starts: the Act reserves its only express fee award for the worker whose employer knowingly pressed an overbroad covenant beyond what was necessary. If the clause appears, keep any disclosure factual and tied to the covenant as written.
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Tolling during breach
The agreement should say whether the clock pauses during a breach — but treat any Texas tolling clause as unsettled rather than standard. No statute or controlling decision blesses adding time back, and an extension still has to survive the requirement that the time limit be reasonable and no greater than necessary. The dependable protection against ongoing violations is an injunction, which the Act expressly authorizes.
Sources for this answer
Primary law
L.1 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(a) supports that any non-compete restraint, including one extended by a tolling clause, must be reasonable as to time and no greater than necessary to protect the promisee's business interest.
a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.
See Tex. Bus. & Com. Code § 15.50(a).
Primary law
L.2 Tex. Bus. & Com. Code § 15.51Tex. Bus. & Com. Code § 15.51(a) supports that a court may grant injunctive relief for breach of an enforceable covenant, the more dependable protection against ongoing violations than a contractual tolling clause.
a court may award the promisee under a covenant not to compete damages, injunctive relief, or both damages and injunctive relief for a breach by the promisor of the covenant.
See Tex. Bus. & Com. Code § 15.51(a).
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Remedies
Look for the irreparable-harm acknowledgement and the consent to injunctive relief — then note the Texas stakes: if the covenant turns out overbroad, injunctive relief after reformation is all the employer gets, because damages for pre-reformation breaches are statutorily off the table.
Read any fee clause against a statute that points the other way: the Act's only express fee award runs to the worker who proves knowing over-enforcement, and whether the general contract-fee statute can supply enforcement fees despite the Act's exclusivity is unresolved. The dependable employer fee path is a trade-secret claim under the Texas UTSA. Check that any fee-shifting is mutual and does not promise what the statute may not deliver.
Sources for this answer
Primary law
M.1 Tex. Bus. & Com. Code § 15.51Tex. Bus. & Com. Code § 15.51(a) supports that a court may award the promisee damages, injunctive relief, or both for a breach of a covenant not to compete by the promisor.
a court may award the promisee under a covenant not to compete damages, injunctive relief, or both damages and injunctive relief for a breach by the promisor of the covenant.
See Tex. Bus. & Com. Code § 15.51(a).
Primary law
M.2 Tex. Bus. & Com. Code § 15.51Tex. Bus. & Com. Code § 15.51(c) supports that an employer may not recover damages for a breach occurring before an overbroad covenant is reformed and is limited to injunctive relief in that situation.
the court may not award the promisee damages for a breach of the covenant before its reformation and the relief granted to the promisee shall be limited to injunctive relief.
See Tex. Bus. & Com. Code § 15.51(c).
Primary law
M.3 Tex. Bus. & Com. Code § 15.51Tex. Bus. & Com. Code § 15.51(c) supports that, in a personal-services covenant case, the court may award the promisor (the employee) its costs and reasonable attorney's fees where the employee proves the employer knew at execution the covenant was overbroad and nonetheless sought to enforce it beyond what was necessary.
the court may award the promisor the costs, including reasonable attorney's fees, actually and reasonably incurred by the promisor in defending the action to enforce the covenant.
See Tex. Bus. & Com. Code § 15.51(c).
Primary law
M.4 Tex. Civ. Prac. & Rem. Code § 134A.005Tex. Civ. Prac. & Rem. Code § 134A.005 supports that, under the Texas Uniform Trade Secrets Act, a court may award reasonable attorney's fees to the prevailing party in defined circumstances, including willful and malicious misappropriation.
The court may award reasonable attorney's fees to the prevailing party if: (1) a claim of misappropriation is made in bad faith; (2) a motion to terminate an injunction is made or resisted in bad faith; or (3) willful and malicious misappropriation exists.
See Tex. Civ. Prac. & Rem. Code § 134A.005.
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Severability and reformation
Read the severability clause knowing the statute already does its work: a Texas court must reform an overbroad-but-ancillary covenant down to the minimum reasonable restraint and enforce it as reformed, whatever the contract says. The catch is the price — no damages for any breach before reformation, injunction only, and a since-withdrawn federal opinion would have courts take up reformation as early as the preliminary-injunction stage. An agreement drafted broad on the theory that the court will fix it trades away the damages claim and flirts with the fee award for knowing over-enforcement. Each covenant should arrive at its final intended scope.
Sources for this answer
Primary law
N.1 Tex. Bus. & Com. Code § 15.51Tex. Bus. & Com. Code § 15.51(c) supports that a court shall reform an overbroad but ancillary covenant to the minimum reasonable restraint and enforce it as reformed, may not award damages for a breach before reformation, and limits relief to injunctive relief.
the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time, geographical area, and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill or other business interest of the promisee and enforce the covenant as reformed, except that the court may not award the promisee damages for a breach of the covenant before its reformation and the relief granted to the promisee shall be limited to injunctive relief.
See Tex. Bus. & Com. Code § 15.51(c).
Case law · 2020-08-07
N.2 Calhoun v. Jack Doheny Companies, Inc.Calhoun supports that a court should consider reformation of an overbroad Texas covenant as part of deciding a preliminary-injunction motion. The Fifth Circuit later withdrew this opinion as moot after the parties settled, so it is persuasive rather than binding.
As we shall show, it should have considered reformation of the agreement in the process of deciding the preliminary injunction motion.
See Calhoun v. Jack Doheny Cos., 969 F.3d 232 (5th Cir. 2020) (later withdrawn as moot).
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Survival
Per-covenant survival keeps each clock independently checkable — perpetual for trade secrets, finite for everything else, and never past the one-year statutory ceiling for covered physicians and health-care practitioners. A bundled survival clause is where an unexamined duration hides, and in Texas an unexamined duration is a reformation trigger.
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Assignment and successors
Confirm employer-side assignability to successors and that the worker cannot assign. Whoever enforces a Texas covenant inherits the statutory posture with it: the assignee must still tie the restraint to a protectable interest of its own and, in a personal-services agreement, carry the burden of proving the covenant fits the Act.
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Governing law, venue, dispute process
The clause should name a governing law, a venue, and a dispute process — but do not let a foreign choice-of-law selection carry the enforceability analysis for a Texas worker. Texas treats covenant enforcement as fundamental policy and has applied its own law over the parties' contrary choice, and the same conflicts machinery can hand the question to another state whose policy is stronger. Forum selection is the half that holds: Texas courts enforce a mandatory forum-selection clause, by mandamus if necessary. Review the pair as a unit — a realistic forum plus Texas law is the combination that operates as written.
Sources for this answer
Case law · 1990-06-06
Q.1 DeSantis v. Wackenhut Corp.DeSantis v. Wackenhut supports that Texas treats non-compete enforcement as fundamental policy and will apply Texas law rather than the contractually chosen law where the chosen law would offend that policy.
We hold that Texas law, not Florida law, applies in this case, and that under Texas law, the noncompetition agreement is unenforceable.
See DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990).
Case law · 2007-06-29
Q.2 In re AutoNation, Inc.In re AutoNation supports that Texas courts will enforce a mandatory forum-selection clause in a non-compete dispute through mandamus relief.
AutoNation now seeks mandamus relief to enforce the mandatory forum-selection clause, and we conditionally grant it.
See In re AutoNation, Inc., 228 S.W.3d 663 (Tex. 2007).
Case law · 2015-10-29
Q.3 Cardoni v. Prosperity BankCardoni v. Prosperity Bank supports that, in a Texas conflicts-law analysis, the Fifth Circuit described Texas as generally allowing geographically and temporally limited non-competes, while ultimately giving effect to Oklahoma's contrary fundamental policy for the covenants at issue.
Texas generally allows them so long as they are limited both geographically and temporally.
See Cardoni v. Prosperity Bank, 805 F.3d 573 (5th Cir. 2015).
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Entire agreement, amendment, waiver, e-signatures
Boilerplate with a Texas wrinkle: the covenant must be ancillary to an otherwise enforceable agreement at the time that agreement is made, so an amendment that re-papers the covenants should restate the consideration story rather than incorporate it by silence. Confirm the merger clause does not accidentally extinguish the very promises — confidential information, training, equity — that make the covenant enforceable.
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Texas statutory gates (Tex. Bus. & Com. Code ch. 15)
The six items below exist only on this Texas page: they implement the Covenants Not to Compete Act's formation gates, the physician and health-care-practitioner buyout regimes, and the boundary between confidentiality drafting and a covert non-compete.
Before reviewing any term, confirm the covenant rides an otherwise enforceable agreement and that the supporting consideration is reasonably related to a protectable interest — promised confidential information that is actually provided, or equity tied to goodwill. The two halves are independent: tight limits cannot save a covenant with no qualifying agreement under it, and a solid agreement cannot save limits broader than the interest. The early case law shows covenants failing this gate outright even where an employment agreement existed.
For an at-will worker, ask what the employer actually delivered. A covenant resting on a revocable promise is illusory when signed and binds only once the employer performs — hands over the confidential information, the training, the equity. Where the job cannot be done without confidential information, the promise to provide it is implied, but the reviewer should still look for evidence of delivery, because enforceability dates from performance rather than from signatures.
A covenant touching the practice of medicine must satisfy the section 15.50(b) conditions: a buyout option priced no higher than the physician's total annual salary and wages at termination, expiry within one year, a territory of at most a five-mile radius around the primary practice location, and terms stated clearly and conspicuously in writing — ceilings, not safe harbors. A general-purpose form rarely carries the physician-specific conditions, so reusing one for a physician fails the package even when its limits look modest. Check the carve-outs before applying the regime: a physician's ownership interest in a licensed hospital or ambulatory surgical center sits outside it, as does managing or directing medical services in a purely administrative capacity.
For agreements on or after September 1, 2025, the covenant must not be written or enforced as if it survives every termination: a physician involuntarily discharged without good cause walks free of it by statute, and good cause means a reasonable basis tied to the physician's conduct, job performance, or employment record. Flag any physician covenant that purports to apply regardless of the reason for separation — the no-fault termination is exactly the case it gets wrong.
Since September 1, 2025, dentists, professional and vocational nurses, and physician assistants have their own statutory floor: the covenant is unenforceable unless it provides a salary-capped buyout, expires within one year, stays within a five-mile radius of where the practitioner primarily practiced, and states its terms clearly and conspicuously. The structure mirrors the physician rules, so a compliant physician form is the natural starting point — but the section is new, and terms like the primary practice location have little appellate gloss yet.
Test the confidentiality clause for covert-non-compete behavior: if honoring it would keep the worker from functioning in the field at all, a court can recharacterize it and run it through the Act's ancillary-and-reasonableness test. The trade-secret statute draws the same line from the other side — an injunction cannot reach the general knowledge, skill, and experience the worker acquired on the job — so sweeping that ordinary expertise into the definition buys exposure, not protection.
Sources for this answer
Primary law
S.1 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(a) supports that a non-compete is enforceable only if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made, with reasonable limits no greater than necessary to protect the promisee's interest.
a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.
See Tex. Bus. & Com. Code § 15.50(a).
Case law · 2011-12-16
S.2 Marsh USA Inc. v. CookMarsh USA v. Cook supports that consideration reasonably related to a protected business interest, such as stock options tied to goodwill, satisfies the Act's consideration requirement.
We hold that, under the terms of the Covenants Not to Compete Act (Act), the consideration for the noncompete agreement (stock options) is reasonably related to the company's interest in protecting its goodwill, a business interest the Act recognizes as worthy of protection.
See Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011).
Case law · 1994-06-02
S.3 Light v. Centel Cellular Co. of TexasLight v. Centel supports that a covenant can fail the ancillary requirement even where the parties have an otherwise enforceable agreement, the early strict reading later relaxed by Marsh.
Although Light and United did have an otherwise enforceable agreement between them, the covenant was not ancillary to or a part of that otherwise enforceable agreement.
See Light v. Centel Cellular Co. of Tex., 883 S.W.2d 642 (Tex. 1994).
Case law · 2006-10-20
S.4 Alex Sheshunoff Management Services, L.P. v. JohnsonSheshunoff supports that an at-will covenant that is illusory at signing becomes enforceable once the employer performs by providing the promised consideration, creating a binding unilateral contract.
The fact that the employer was not bound to perform because he could have fired the employee is irrelevant; if he has performed, he has accepted the employee's offer and created a binding unilateral contract.
See Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006).
Case law · 2009-04-17
S.5 Mann Frankfort Stein & Lipp Advisors, Inc. v. FieldingMann Frankfort supports that where the nature of the work requires confidential information, the employer's promise to provide it can be implied, supplying the consideration that makes the covenant enforceable.
When the nature of the work the employee is hired to perform requires confidential information to be provided for the work to be performed by the employee, the employer impliedly promises confidential information will be provided.
See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009).
Primary law
S.6 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(b)(2) supports that a physician non-compete must provide for a buyout in an amount no greater than the physician's total annual salary and wages at the time of termination.
the covenant must provide for a buyout of the covenant by the physician in an amount that is not greater than the physician's total annual salary and wages at the time of termination of the contract or employment;
See Tex. Bus. & Com. Code § 15.50(b)(2).
Primary law
S.7 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(b)(4) supports that a physician covenant must expire no later than one year after termination, limit the geography to a five-mile radius from the physician's primary practice location, and have terms clearly and conspicuously stated in writing.
(A) expire not later than the one-year anniversary of the date the contract or employment has been terminated; (B) limit the geographical area subject to the covenant to no more than a five-mile radius from the location at which the physician primarily practiced before the contract or employment terminated; and (C) have terms and conditions clearly and conspicuously stated in writing.
See Tex. Bus. & Com. Code § 15.50(b)(4).
Primary law
S.8 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(c) supports that the physician non-compete requirements of § 15.50(b) do not apply to a physician's business ownership interest in a licensed hospital or licensed ambulatory surgical center.
Subsection (b) does not apply to a physician's business ownership interest in a licensed hospital or licensed ambulatory surgical center.
See Tex. Bus. & Com. Code § 15.50(c).
Primary law
S.9 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(b-1) supports that, for the physician non-compete rules, the practice of medicine does not include managing or directing medical services in an administrative capacity.
the practice of medicine does not include managing or directing medical services in an administrative capacity for a medical practice or other health care provider.
See Tex. Bus. & Com. Code § 15.50(b-1).
Primary law
S.10 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(d), as amended by SB 1318 (2025), supports that a physician non-compete is void and unenforceable if the physician is involuntarily discharged without good cause, and defines good cause as a reasonable basis for discharge directly related to the physician's conduct, job performance, or employment record.
a covenant not to compete relating to the practice of medicine is void and unenforceable against a person licensed as a physician by the Texas Medical Board if the physician is involuntarily discharged from contract or employment without good cause. For purposes of this subsection, "good cause" means a reasonable basis for discharge of a physician from contract or employment that is directly related to the physician's conduct, including the physician's conduct on the job or otherwise, job performance, and contract or employment record.
See Tex. Bus. & Com. Code § 15.50(d).
Primary law
S.11 Tex. Bus. & Com. Code § 15.501Tex. Bus. & Com. Code § 15.501, added by SB 1318 (2025), supports that a non-compete is unenforceable against a dentist, nurse, or physician assistant unless it provides a salary-capped buyout, expires within one year, is limited to a five-mile radius, and is clearly and conspicuously stated in writing.
A covenant not to compete relating to the practice of dentistry or nursing, or practice as a physician assistant, as applicable, is not enforceable against a health care practitioner unless the covenant: (1) provides for a buyout of the covenant by the health care practitioner in an amount that is not greater than the practitioner's total annual salary and wages at the time of termination of the practitioner's contract or employment; (2) expires not later than the one-year anniversary of the date the contract or employment has been terminated; (3) limits the geographical area subject to the covenant to no more than a five-mile radius from the location at which the health care practitioner primarily practiced before the contract or employment terminated; and (4) has terms and conditions that are clearly and conspicuously stated in writing.
See Tex. Bus. & Com. Code § 15.501(b).
Primary law
S.12 Tex. Bus. & Com. Code § 15.501Tex. Bus. & Com. Code § 15.501(a) supports that the covered health care practitioners are licensed dentists, persons licensed in professional or vocational nursing, and licensed physician assistants.
(1) a person licensed by the State Board of Dental Examiners to practice dentistry in this state; (2) a person licensed under Chapter 301 , Occupations Code, to engage in professional or vocational nursing; or (3) a physician assistant licensed under Chapter 204 , Occupations Code.
See Tex. Bus. & Com. Code § 15.501(a).
Primary law
S.13 Tex. Bus. & Com. Code § 15.50Tex. Bus. & Com. Code § 15.50(a) supports that a confidentiality clause broad enough to function as a non-compete would be judged under the Act's ancillary-and-reasonableness test rather than escaping it.
a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.
See Tex. Bus. & Com. Code § 15.50(a).
Primary law
S.14 Tex. Civ. Prac. & Rem. Code § 134A.003Tex. Civ. Prac. & Rem. Code § 134A.003 supports that a trade-secret injunction may not prohibit using the general knowledge, skill, and experience acquired during employment, marking the boundary confidentiality drafting cannot cross.
Actual or threatened misappropriation may be enjoined if the order does not prohibit a person from using general knowledge, skill, and experience that person acquired during employment.
See Tex. Civ. Prac. & Rem. Code § 134A.003.