Yes, non-compete agreements are legal in Texas, but only if they meet strict requirements. Texas does not automatically ban non-competes. Instead, Texas courts enforce them only when they are reasonable, supported by valid consideration, and designed to protect legitimate business interests such as company secrets or specialized training. A poorly drafted non-compete can be thrown out, rewritten by a judge, or ruled unenforceable.
Because Texas favors competition and job mobility, non-competes in Texas are legal only when they are narrow, fair, and properly supported.
What Makes a Non-Compete Legal in Texas?
Texas law requires that a non-compete agreement must satisfy two legal tests:
1. The Employer Must Provide Consideration
The employer must give the employee something of value in exchange, such as:
- confidential information
- specialized training
- trade secrets
- stock options in some cases
Simply giving someone a job offer alone is not enough in many cases. There must be a business benefit tied to confidentiality or proprietary knowledge.
2. The Limits Must Be Reasonable
Texas requires restrictions to be narrow and not oppressive. A valid agreement must be reasonable in:
- Time (how long it lasts)
- Geographic area (where it applies)
- Scope of work (what it prohibits)
When Are Non-Competes Illegal in Texas?
A non-compete is not enforceable if it:
- Lasts too long (example: 7–10 years for an ordinary employee)
- Covers a massive geographic area (example: “the entire United States” for a local job)
- Blocks a worker from performing any work in their industry
- Offers no valid business benefit or training
- Applies to a minimum-wage or low-skill job without confidentiality access
Courts will strike down agreements designed only to intimidate employees from leaving rather than protecting real business interests.
Are Non-Competes Allowed for Low-Wage Workers?
Typically not.
Texas courts usually reject non-competes for workers who:
- do not receive trade secrets
- perform basic labor
- have no access to confidential data
For example, a fast-food cashier cannot normally be prohibited from working for another burger place. But a sales director who has access to client lists and pricing strategies probably can.
Can Texas Courts Modify an Unreasonable Non-Compete?
Yes. Texas judges can “reform” an agreement.
Unlike many states, Texas courts do not automatically void a non-compete if it’s written poorly. Judges can:
- shorten the time period
- reduce the geographic reach
- limit the restricted job duties
This ability to modify agreements makes non-competes more enforceable in Texas than in some states, but only after adjustments.
Industries Where Non-Competes Are Common in Texas
Texas courts frequently enforce non-competes in:
- Healthcare (surgeons, specialists, dentists)
- Tech and software
- Oil, gas, and energy consulting
- Finance, insurance, investments
- Sales roles involving private client lists
- Specialized manufacturing
In these industries, employees often receive confidential data or strategic business knowledge.
Special Rules for Doctors in Texas
Texas has unique protections for physicians. A medical non-compete must allow:
- The doctor to buy out the agreement
- Access to patient medical records
- Continuity of care during emergencies or chronic treatment
This ensures patients are not abandoned.
What About the Federal Ban Proposal?
The Federal Trade Commission (FTC) previously attempted to ban most non-competes nationwide. However:
- Courts blocked the FTC’s rule
- Texas federal judges were among those skeptical of it
- As of 2026, there is no federal ban
Texas continues to enforce non-competes under state law unless future federal action changes the landscape.
Final Note
Non-compete agreements are legal in Texas, but only when they are reasonable and tied to legitimate business interests. Courts enforce well-written agreements but reject or rewrite those that are overly broad, abusive, or lacking valid consideration. Workers with access to trade secrets can likely be held to a non-compete, while low-wage workers typically cannot.
