Texas Non-Compete Agreement Template (PDF & Word) – 2026

A Texas non-compete agreement is a contract between employer and employee that restricts the employee, after termination, from working for a competitor or starting a competing business within a defined scope. Unlike California, Texas enforces non-compete agreements under Texas Business and Commerce Code §15.50 — Non-competes ENFORCEABLE if reasonable in scope, time, geography, provided the restraint is reasonable in scope, geographic area, and duration, and is supported by adequate consideration.

This page provides a free, Texas-compliant non-compete agreement template in both PDF and Microsoft Word format. The template incorporates the consideration, reasonableness, blue-pencil, and severability provisions that Texas courts look for when evaluating enforceability. Download the version that fits your workflow and customize the bracketed fields before execution.

A Concrete Example

A regional sales manager leaves Company A and joins Company B in a similar role. Company A sues to enforce a non-compete that prohibits the employee from working “in the same industry” for “two years” “anywhere in the United States.” A Texas court will almost certainly find that restraint overbroad — nationwide scope for a regional employee, two years is at the upper end, “same industry” is too broad. The court then either blue-pencils it (reducing to 12 months in the actual sales territory) or strikes it entirely.

Drafting tip: the non-compete that survives is the one that matches the employee’s actual role. A regional sales manager who worked the Northeast gets a non-compete limited to the Northeast for the duration that confidential pricing information remains current (typically 12 months). A narrowly tailored restraint is enforceable; an overbroad one becomes a gift to the former employee. The template includes the severability and reformation language that lets courts narrow rather than strike.

Are Non-Competes Enforceable in Texas?

There is no shortage of free non-compete agreement templates online. The problem is that most of them are either incomplete (missing the disclosures or signature blocks that matter) or so heavily watermarked and bait-and-switch that they’re functionally useless. This one isn’t. Download in PDF or Word, customize the bracketed fields, and you are done.

Texas Reasonableness Factors

Duration

Texas courts generally uphold post-employment restraints of 6 to 24 months. Two years is the most common upper bound. Restraints of three years or longer are often struck down except in the sale-of-business context. The template defaults to 12 months — adjust based on the employee’s role and the time it takes for confidential information to become stale.

Geographic Scope

The restricted area must match the employer’s actual business footprint. A «nationwide» restraint for an employee who only serviced a single county will fail. Best practice in Texas: list specific counties, a radius from the employer’s office, or named cities. Avoid open-ended language like «anywhere the Company does business.»

Scope of Activities

The restraint must be limited to activities that compete with the employer’s actual business and that the employee actually performed. A non-compete that prevents a sales engineer from taking any job at a competitor — including in HR or accounting — is over-broad and will be narrowed by the court or struck entirely.

Consideration

Texas requires adequate consideration to support a non-compete. For new hires, the offer of employment itself is consideration. For existing employees, continued at-will employment may or may not be sufficient depending on Texas case law — best practice is to provide additional consideration (raise, bonus, equity, promotion) at the time the non-compete is signed.

Legitimate Business Interests Recognized in Texas

Texas courts will enforce a non-compete only when it protects a recognized legitimate business interest. The most commonly accepted interests are:

• Trade secrets and confidential business information — pricing formulas, manufacturing processes, customer lists that qualify as trade secrets under the Texas UTSA.
• Substantial customer relationships — relationships the employer paid to develop and that the employee inherited as part of their role.
• Extraordinary or specialized training — training that cost the employer significant money and provided the employee with skills beyond ordinary industry knowledge.
• Goodwill — the reputation and customer loyalty the employer built and entrusted to the employee.

An employer’s general interest in avoiding competition is NOT a legitimate business interest. The restraint must protect something specific that would be harmed by the employee’s competition.

How to Fill Out the Texas Non-Compete Template

1. Parties. Full legal names of employer and employee.
2. Effective date. The date both parties sign (typically the employee’s hire date or the date of the consideration event).
3. Consideration. Identify the specific consideration — offer of employment, signing bonus, promotion, equity grant. Vague «good and valuable consideration» language is weaker.
4. Duration. The post-employment restraint period (start with 12 months).
5. Geographic scope. List specific counties, a radius, or named cities.
6. Restricted activities. Define what the employee cannot do — work in a specific role, for a specific class of competitors, in a specific industry segment.
7. Customer non-solicit. Often included alongside the non-compete; covers customers the employee dealt with in the last 12-24 months.
8. Employee non-solicit. Covers active employees only; do not extend to former employees.
9. Confidentiality. Cross-reference any separate NDA or include integrated confidentiality language.
10. Severability and blue-pencil. Authorize the court to narrow over-broad provisions rather than strike them entirely.
11. Governing law and venue. Texas law and Texas courts.
12. Signatures. Both parties sign and date.

Common Drafting Mistakes

• Over-broad geographic scope («anywhere in the world,» «anywhere the Company does business»).
• Excessive duration (3+ years for an ordinary employee).
• Failing to identify a legitimate business interest the restraint protects.
• Boilerplate language copied from out-of-state templates that doesn’t fit Texas doctrine.
• Inadequate consideration (using a non-compete with an existing employee without giving anything new).
• Missing severability and blue-pencil authorization — without them, an over-broad provision may take the entire non-compete down with it.

Frequently Asked Questions

Is a non-compete enforceable in Texas?

Yes, if it is reasonable in scope, time, and geographic area, and protects a legitimate business interest. Unreasonable restraints are unenforceable or judicially narrowed.

How long can a Texas non-compete last?

6 to 24 months is the typical enforceable range. Two years is the most common upper bound for ordinary employees.

What is «blue-pencil» doctrine?

Blue-pencil doctrine allows a court to narrow an over-broad non-compete (e.g., reduce a 3-year restraint to 1 year, or reduce a nationwide scope to a single state) rather than strike it entirely. Texas permits blue-pencil revision when the non-compete includes a severability and reformation clause.

Do I need to give additional consideration to an existing employee?

Best practice in Texas: yes. Continued at-will employment is sometimes sufficient consideration, but providing a tangible benefit (raise, bonus, promotion, equity) at the time the non-compete is signed dramatically strengthens enforceability.

Can I use this template for an independent contractor?

The template is drafted for employees. Non-competes with independent contractors are subject to additional scrutiny in Texas — many courts apply a stricter reasonableness standard. For high-stakes contractor relationships, have the agreement reviewed by a Texas employment attorney.

What happens if my non-compete is over-broad?

With a properly drafted severability and blue-pencil clause, the Texas court will narrow the over-broad provision and enforce the remainder. Without those clauses, the entire non-compete may be voided.

Does the non-compete need to be notarized?

No. Texas does not require notarization. Both parties’ signatures are sufficient.

Can a non-compete cover work done as an unpaid volunteer?

Generally no. Most Texas courts limit non-competes to paid competing employment. A genuine volunteer activity at a non-profit unrelated to the employer’s industry is unlikely to be deemed a breach.

Download the Free Texas Non-Compete Template

Both versions below are the same Texas-compliant non-compete agreement, formatted for different workflows. Customize the bracketed fields before execution, ensure adequate consideration is provided, and have both parties sign and date.

The template above is a starting point — not a substitute for legal counsel. State laws change, court interpretations evolve, and individual circumstances vary in ways a generic form cannot anticipate. We update this template at least annually, but verify the current state-specific requirements before relying on it for any significant transaction. Consult an attorney for stakes above $25,000 or any disputed matter.

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