How to Enforce a Non-Compete Agreement in Texas After the 2021 Covenants Not to Compete Act Amendments
Texas employers can still enforce non-compete agreements, but only if the covenant is “ancillary to or part of” an otherwise enforceable agreement and is reasonable in time, geographic area, and scope under Texas Business & Commerce Code § 15.50. The 2021 amendments clarified key enforcement standards and strengthened courts’ ability to reform overbroad restrictions rather than void them. This article explains how Texas attorneys should evaluate, plead, and prove a non-compete case after the 2021 changes.
Why the 2021 Texas non-compete amendments matter
Texas has long permitted non-compete agreements, but only within a narrow statutory framework. The governing law is the Texas Covenants Not to Compete Act (“CNCA”), codified primarily at Texas Business & Commerce Code §§ 15.50–15.52. In 2021, the Legislature amended the CNCA to clarify enforcement mechanics and to address recurring litigation disputes—especially around how and when courts should “reform” an overbroad covenant and what remedies remain available when the restriction is imperfect.
For employers, the practical effect is not “open season” on employees; it is a clearer roadmap: draft narrowly, tie the restriction to a legitimate protectable interest, and be prepared to prove necessity and reasonableness. For employees and competing businesses, the amendments reinforce the need to challenge enforceability early, focus on the employer’s protectable interests, and press statutory limits on injunctive relief and damages.
The controlling statute: enforceability elements under Texas Business & Commerce Code § 15.50
To enforce a non-compete in Texas, the employer (or party seeking enforcement) must show the agreement meets the CNCA’s baseline requirements. Section 15.50(a) contains two core elements:
1) “Ancillary to or part of” an otherwise enforceable agreement
A Texas non-compete is enforceable only if it is ancillary to or part of another enforceable agreement at the time the agreement is made. In practice, this typically means the employer provides something of value that is tied to the restraint—most commonly confidential information, trade secrets, specialized training, or stock/ownership benefits—and the non-compete is designed to protect that interest.
Example: An employer provides access to customer pricing, vendor terms, and a proprietary sales process in a signed employment agreement with confidentiality provisions. A non-compete that limits the employee from using that knowledge to compete may satisfy the “ancillary” requirement.
Common problem: A stand-alone non-compete with no confidentiality obligations, no IP assignment, and no meaningful consideration beyond “continued employment” can be vulnerable—especially if the employer cannot show the restraint protects a real, provided benefit.
2) Reasonableness in time, geographic area, and scope of activity
Even if “ancillary,” the restriction must be reasonable and may not impose a greater restraint than necessary to protect goodwill or other business interests. Texas courts analyze:
Time: Many enforceable covenants fall in the 6–24 month range, but the right duration depends on industry, sales cycles, and the nature of information at risk.
Geographic area: The territory must correspond to where the employee actually worked or had influence, not where the employer merely hopes to expand.
Scope of activity: The prohibited activities should match what the employee did and what threatens the employer’s protectable interests. A ban on “any work for a competitor” is more suspect than a ban on soliciting certain accounts or performing substantially similar services for competing customers.
What the 2021 amendments changed in real-world enforcement
While the CNCA already permitted courts to reform overbroad covenants, the 2021 amendments are commonly understood as strengthening the “reformation-first” approach and clarifying remedy limitations tied to overbreadth. The overall direction is consistent: Texas courts prefer to narrow and enforce a covenant to the extent reasonable rather than invalidate it entirely, especially where the parties’ contract demonstrates a legitimate protectable interest.
From a litigation standpoint, the amendments are most important because they shape:
- How quickly you should seek injunctive relief (and what you must prove);
- Whether damages are available for pre-reformation breaches in an overbroad covenant (a frequent battleground); and
- How attorneys should plead for reformation and alternative injunctive language from day one.
Practice note: Because statutory interpretation and case law application can be fact-specific, Texas counsel should review the current text of §§ 15.50–15.52 and relevant appellate decisions in the governing district to confirm how local courts are applying the 2021 changes.
Step-by-step: how to enforce a non-compete agreement in Texas
Step 1: Confirm you have a signed, integrated agreement and clean contract chain
Before filing anything, verify:
- The employee signed the agreement (and any later amendments);
- The employer entity seeking enforcement is the contracting party (or has a valid assignment/merger chain);
- Choice-of-law and venue clauses align with Texas statutory policy;
- The agreement includes supporting covenants (confidentiality, non-solicit, IP assignment) that help establish the “ancillary” requirement.
Example: If a subsidiary employed the individual but the parent company sues, you may need assignment evidence, corporate records, or a merger agreement to establish standing.
Step 2: Identify the protectable interests you will actually prove
Texas courts do not enforce non-competes to punish job changes; they enforce them to protect legitimate business interests. The most common protectable interests include:
- Trade secrets and confidential information (pricing, margins, bids, customer requirements, proprietary processes);
- Customer goodwill developed at the employer’s expense;
- Specialized training that is more than general skills.
Drafting-to-litigation alignment: If your agreement justifies the restraint as protecting “goodwill and confidential information,” your evidence should match. Overreaching theories (e.g., “we want to prevent competition”) can undermine credibility and reasonableness.
Step 3: Evaluate reasonableness and prepare a reformation position early
Assume the defense will argue overbreadth. Under the CNCA, courts may reform unreasonable limitations and enforce the covenant as reformed. A strong enforcement strategy anticipates that possibility and offers the court a clear, reasonable alternative.
Examples of reformation-friendly positions:
- Narrow geography to counties/metros where the employee actually worked;
- Narrow scope to the specific service line or product category the employee sold;
- Narrow customer restrictions to accounts the employee serviced or learned about during a defined look-back period.
This preparation matters in temporary restraining order (TRO) and temporary injunction settings where speed and clarity drive outcomes.
Step 4: Send a targeted demand letter (and preserve evidence)
A well-crafted demand letter can set up injunctive relief by documenting notice, the contractual terms, and the threatened harm. It can also trigger preservation obligations and position the case for early resolution.
At the same time, preserve and collect:
- Signed agreements and policy acknowledgments;
- Exit interview notes and device return checklists;
- CRM access logs and download/export activity;
- Emails/texts indicating solicitation or misuse of information;
- Customer declarations describing who contacted them and what was said.
Step 5: File suit and pursue fast injunctive relief (TRO/temporary injunction)
Most Texas non-compete cases are won or lost early. If the employee is actively soliciting customers or using confidential information, the employer typically seeks a TRO followed by a temporary injunction.
To obtain temporary injunctive relief, the movant generally must show:
- A viable cause of action (breach of contract and/or misappropriation claims);
- A probable right to relief (enforceable covenant and likely breach);
- Probable, imminent, and irreparable injury without an injunction.
Irreparable harm evidence: Courts respond to concrete proof—lost bids, customer switching, pricing undercut based on inside information, or the “inevitable disclosure” type risk tied to a highly similar role. Bare assertions that “we will lose goodwill” are weaker.
Step 6: Plead complementary claims: trade secrets, fiduciary duty, tortious interference
Non-compete enforcement frequently overlaps with other claims that can support injunctive relief and broaden discovery. Depending on facts, consider:
- Trade secret misappropriation (under the Texas Uniform Trade Secrets Act, if applicable): helpful where downloads, forwarding, or use of pricing/customer lists is shown;
- Breach of fiduciary duty/duty of loyalty (for certain roles or pre-resignation conduct);
- Tortious interference (against the new employer if it knowingly induced breach);
- Computer access/device claims where evidence supports them.
Strategic benefit: Even if a court reforms the non-compete, trade secret claims can still support broader injunctive provisions (e.g., prohibiting use of specific confidential information) and targeted forensic protocols.
Key defenses and how Texas courts typically evaluate them
Defense: the non-compete is not “ancillary” to an enforceable agreement
Employees often argue the employer did not actually provide confidential information, training, or other consideration tied to the covenant. Employers should be prepared to prove access and the business reason for the restraint through onboarding records, system permissions, training materials, and job duties.
