Learn How To Create a Non-Compete Agreement in Texas

Standardized Legal Documents Learn How To Create a Non-Compete Agreement in Texas

Create a Non-Compete Agreement in Texas in a Jiffy

If you are running a business, you naturally want to conceal your company secrets from the competition. Non-compete agreements can help you do that by restricting your employees’ behavior during and after their employment.

Non-compete agreements are enforceable in Texas under certain conditions. Discover when you should create a non-compete agreement in Texas and what it should contain—with the help of DoNotPay!

What Is a Non-Compete Agreement?

A non-compete agreement is a contract that forbids an employee to work for the competition or become a competitor for a specific period. By imposing a non-compete agreement, employers prevent employees from exposing or using company information, patents, formulas, or business methods outside of the company.

Non-compete agreements have benefits and disadvantages for both the employer and the employee, as presented in the table below:

Non-Compete Agreements
  • Reduce turnovers
  • Protect company secrets 
  • Encourage employers to invest in expensive employee training
  • Limit employee’s bargaining leverage
  • Force employees to leave the business field after the employment ends

Some states, such as California or Oklahoma, dismiss non-compete agreements altogether. Others, like Texas, allow non-compete agreements to be enforced under certain conditions.

Texas Non-Compete Agreement in a Nutshell

Non-compete agreements in Texas are designed to reasonably limit the employees’ place and nature of work after the employment ends. The Texas law balances promoting a healthy business competition and protecting individual businesses’ interests. It does so by:

  1. Ensuring that the non-compete agreement will not set unreasonable limits for worker’s ability to practice a profession
  2. Making the employer prove that a lack of a non-compete agreement will harm their business

While Texas used to require solid proof for the necessity of non-compete agreements, nowadays, it supports its enforcement more often.

How To Enforce a Non-Compete Agreement in Texas

To make a non-compete agreement in Texas, a company has to consider the following elements:

  1. Being reasonable about the duration of the agreement
  2. Setting acceptable boundaries for the areas where the employee can do business
  3. Determining the reasonable range of the employee’s future work 
  4. Specifying the company’s interests and competitive advantages that need to be protected by the agreement
  5. Offering special consideration to employees under the contract, such as a raise or promotion
  6. Including a clause that states the potential new owners of the company will have the right to enforce the non-compete agreement 
  7. Specifying that the company will have the right to receive an equitable relief if the employee violates the agreement
  8. Indicating that the agreement was made according to the Texas law

Which Sections Should a Texas Non-Compete Agreement Contain?

Non-compete agreements in Texas have a strict structure and include all key elements. If you omit a section from the agreement or fail to convey the conditions clearly and carefully, the Texas court can dismiss the agreement.

Take a look at the requirements for drafting a non-compete agreement under Texas law:

Texas Non-Compete Agreement SectionDetails

Parties entering the agreement

Provide the participant’s names in the introductory part. The agreement must contain the full legal name of the company

Forbidden employee behavior

Define the limitations or restrictions for the employee actions regarding:

  • Other employees
  • Business practices
  • Client-customer relations
  • General and specific competitors

The time frame for the agreement

Stipulate the exact period for enforcing the agreement (weeks, months, years), as well as its start and end date

The effective region that the agreement covers

Specify the areas in which the employee will be forbidden from doing business

Respective parties’ signatures

Provide signatures and effective dates at the end of the document

Let DoNotPay Create a Texas Non-Compete Agreement for You

Non-compete agreements are sensitive documents. Every state that allows them has to balance between protecting businesses and employees. Mistakes are not tolerated—Texas courts will likely dismiss any agreement that can be perceived as unclear or unreasonable.

Luckily, you don’t have to hire expensive lawyers to draw up a contract—you can use DoNotPay!

Our app’s newest feature will help you create various legal documents easily! You won’t have to research laws and study legal terms—DoNotPay will do all the work for you. We use the essential information you provide to create a personalized legal contract. 

You only need to access DoNotPay from any web browser and:

  1. Enter the name of the document in the search field
  2. Provide a few answers regarding your business, state of residence, and contract requirements
  3. Wait for DoNotPay to create a professional legal document that any state court would except

Take a look at some of the other contracts and agreements we can generate for you:

DoNotPay’s Knowledge Base Is a Vault of Legal Documents 

Use our extensive knowledge base to learn how to write a contract or find reliable contract templates. Take a look at all the legal documents you can read up on:

Types of Legal Documents

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