The Business Owner’s Guide to Non-Compete Agreements in Texas (Post-2024 Ruling)

Non-compete agreements have always been tricky in Texas—but a major ruling in late 2024 changed the game. If you’re a business owner, founder, or investor relying on non-competes to protect your employees, clients, or trade secrets, you need to understand how this ruling affects your contracts.

In this guide, we’ll break down exactly what changed, what remains enforceable, and how to use legally valid alternatives like NDAs and non-solicits to shield your business in 2025.

Understanding Non-Compete Agreements: Essential Reading Before Signing in Texas.

Quick Recap: What the 2024 Ruling Said

In November 2024, the Texas Supreme Court ruled that overly broad non-compete agreements are unenforceable, even if other parts of the contract are valid.

The court emphasized:

• Non-competes must be narrow in duration, geography, and scope

• Blanket restrictions on competition are now presumed invalid unless specifically justified

• Employers must show clear business justification and consideration (i.e., something of value given to the employee)

What No Longer Works in 2025 For Non-Compete Agreements

Non-compete clauses that:

• Ban employees from working in an entire industry

• Last longer than 12–24 months

• Cover geographic areas where the business doesn’t actively operate

• Lack a clear offer of value (like stock options or training access)

What Still Works (If Done Right)

You can still enforce non-compete agreements in Texas—but they must meet these conditions:

1. Clear, limited scope – e.g., “employee shall not solicit prior clients for 1 year within Harris County.”

2. Reasonable duration – usually 6 to 18 months max

3. Specific job functions – e.g., barring only former sales reps from soliciting clients they personally managed

Better Alternatives: Non-Solicit + NDA Combo

Many Texas employers are now shifting to non-solicitation agreements and non-disclosure agreements (NDAs) instead of aggressive non-competes.

These contracts:

• Prevent former employees from poaching clients or staff

• Legally bind workers to keep confidential info private

• Are far more likely to hold up in court

Pro Tip: Tailor Every Agreement

There’s no such thing as a one-size-fits-all non-compete. Your contracts should reflect:

• The employee’s actual role and influence

• Your business’s industry and footprint

• Whether trade secrets or client lists are truly at risk

Copy-paste templates are lawsuits waiting to happen.

How The Spencer Law Firm Can Help

We draft and enforce legally sound employment agreements for Texas business owners. Our attorneys:

• Review or rewrite existing non-competes

• Build custom NDA and non-solicit packages

• Represent clients in enforcement actions or disputes

• Ensure compliance with new court rulings

Don’t risk having your non-compete thrown out in court. 

📞 Book a free consultation with The Spencer Law Firm today. 

✔️ We’ll make sure your contracts protect your business and actually hold up in court.