Non-competes in Texas: what employers actually need to know right now.

As of this writing, no. The FTC issued a final rule in April 2024 that would have banned most non-competes nationwide. A federal district court in the Northern District of Texas enjoined the rule before it took effect, holding that the FTC exceeded its statutory authority. The Fifth Circuit affirmed. The rule has not been implemented and shows no realistic path to enforcement given the current federal posture. Texas employers should plan as though the FTC rule does not exist. Texas state law — the Texas Covenants Not to Compete Act — governs non-compete agreements in Texas and will remain the controlling standard for the foreseeable future.

The CNCA (Texas Business and Commerce Code §15.50–15.52) establishes four requirements. First, the non-compete must be ancillary to an otherwise enforceable agreement — in the employment context, typically a confidentiality and trade secret protection agreement with real substance. Second, the agreement must be supported by adequate consideration. Third, the restrictions must be reasonable in time, geographic area, and scope of activity. Fourth, the restrictions must be no greater than necessary to protect the employer's legitimate business interest. Courts are authorized to reform — narrow — an overbroad agreement rather than void it entirely, which is a double-edged provision.

Texas courts evaluate reasonableness case by case. For duration: one to two years is generally defensible; three years sometimes upheld for senior executives; five years or more faces reformation risk. For geography: the restriction must be tied to where the employee actually worked and had relationships — not the employer's national footprint if the employee only operated locally. For activity scope: limited to what the employee actually did, not every business line the employer touches. The most common error is drafting as broadly as possible and relying on reformation. Courts do reform, but the litigation is expensive, the outcome uncertain, and overly broad agreements can signal bad faith.

Potentially — but the circumstances matter. If the employer terminates without cause in a way that deprives the employee of the consideration promised under the agreement, some Texas courts have found the non-compete unenforceable on those facts. The argument: the employer cannot eliminate the promised benefit and still enforce the corresponding restriction. Whether this applies depends on how the agreement was structured, what consideration was promised, and the specifics of termination. This is one reason how a non-compete is drafted at hiring affects whether it can be enforced years later in circumstances you couldn't predict.

Three different restrictive covenants with different purposes and enforceability profiles. A non-compete restricts where and for whom the employee can work — it limits competitive employment or self-employment. A non-solicitation restricts the employee from soliciting the employer's customers or other employees — it doesn't prevent competitive work, only active poaching. A confidentiality agreement restricts disclosure or use of the employer's confidential information and trade secrets — it doesn't limit where they work. Non-solicitation and confidentiality agreements are generally more enforceable in Texas than broad non-competes because they are narrower. For most businesses, these two instruments accomplish the practical protection goals without the enforceability risk of a full non-compete.

A defensible Texas non-compete needs: a meaningful confidentiality and trade secret protection obligation in the underlying employment agreement — not boilerplate; real consideration (the offer of employment for new hires; something additional for existing employees signing mid-employment); restrictions calibrated to the employee's actual role, actual geography, and actual client relationships; and — critically — the employer must actually provide the confidential information and specialized access the agreement promises. An agreement where the employer promises trade secret access but never delivers it has no anchor. The agreement should be reviewed and updated periodically, especially after an employee's role changes significantly.

Yes — injunctive relief is the primary remedy, and Texas courts have authority to grant TROs and temporary injunctions in appropriate cases. To get a TRO, you must show a probable right to recovery on the merits, probable imminent and irreparable harm if the injunction is denied, and that the harm to you outweighs the harm to the employee. Proving irreparable harm is the key — courts don't assume it; you must show monetary damages would be inadequate. The TRO process can move in 48–72 hours when properly supported. Act quickly: delay in seeking injunctive relief signals the harm isn't truly irreparable, which is exactly the wrong message to send a court.

Unlike some states where an overbroad non-compete is simply void, the Texas CNCA authorizes courts to reform — narrow — a non-compete that is unreasonable, reducing scope, duration, or geography rather than striking it entirely. For employers, this means a somewhat overbroad agreement may still be partially enforced. For employees, it means even a dramatically overbroad restriction may result in some enforcement. However, courts have shown increasing willingness to refuse reformation when an agreement is so overbroad it suggests bad faith. The better approach: draft defensibly reasonable from the start rather than maximally broad and hoping for favorable reformation.