Yes, a non-compete is enforceable under the following conditions:^[1]

• Signed at the time of employment. Must be an ancillary to or part of an offer for employment;
• Limitations. The non-compete 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; and
• Restrictions for physicians. If a physician signs a non-compete, the following rules apply:
  • Cannot deny access to a list of patients the physician has treated within the past year;
  • Must provide access to medical records of the physician’s patients (for a reasonable fee); and
  • That any list of patients or medical records is provided in a format agreeable by both the employer and physician.

An attorney cannot participate in any type of relationship or agreement that restricts their right to practice within the State.^[2]

Texas requires that for a non-compete to be valid, it “must be supported by consideration.”^[3]

Texas recognizes consideration as a “present exchange bargained for in return for a promise.” Therefore, no matter the training or knowledge gained in the past, it does not constitute sufficient consideration for continued employment.^[4]

If an at-will employee agrees to a non-compete, such covenant “must be supported by independent valuable consideration.”^[3]

2 to 5 years has been deemed as “reasonable time” by the Court of Appeals.^[5]

A non-compete cannot go beyond the geographical area where the employee worked or where the employer conducted its business.^[6]

Texas statutes allow for an overbroad non-compete in relation to time, geographical area, or scope of activity to be reformed and made enforceable in accordance with State law. Such rulings will be made when a court deems the restraints to be more than necessary to protect the goodwill of the business.^[7]

3 cases had awarded punitive damages to employers when an employee had violated their non-compete:

• $138,000.00^[8]
• $49,322.50^[9]
• $7,313.72^[10]