Texas Confidentiality and Invention Assignment Agreement
Texas enforces employee non-competes and non-solicits that are tied to an otherwise enforceable agreement and are reasonable in time, geographic area and scope of activity. The statute sets no earnings threshold. Courts reform overbroad covenants instead of striking them, and a clause choosing another state's law may not displace the Texas rules for a Texas employee.
What Texas law does to this document
The statutory test
A covenant not to compete is enforceable in Texas if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made. It must contain limits on time, geographic area and scope of activity that are reasonable and impose no greater restraint than needed to protect goodwill or another business interest. These criteria are exclusive and preempt the common law. The Texas Supreme Court applies the same statute to covenants against soliciting customers and employees.
Tex. Bus. & Com. Code §§ 15.50(a), 15.52; Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011)What counts as consideration
An enforceable agreement can arise from at-will employment only if the consideration is not illusory. A promise the employer could escape by firing the employee does not bind when made. The covenant becomes enforceable when the employer performs the promise it made in exchange, such as providing confidential information or specialized training. Stock options qualify as well, because they are reasonably related to the employer's interest in protecting its goodwill.
Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006); Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011)Burden of proof, reformation and fees
In an agreement whose main purpose is personal services, the employer carries the burden of proving that the covenant meets the statute. If the limits are unreasonable, the court must reform them and enforce the covenant as reformed, but the employer may not recover damages for conduct before the reformation. An employer that knew the covenant was unreasonable when it was signed, and tried to enforce it beyond what was necessary, may be ordered to pay the employee's costs and attorney's fees.
Tex. Bus. & Com. Code § 15.51(b), (c)Special rules for health care practitioners
Amendments effective September 1, 2025 tightened the rules for physicians and extended similar rules to dentists, nurses and physician assistants. For these practitioners, the covenant must allow a buyout no greater than total annual salary and wages at termination, expire within one year after termination, and reach no farther than a five-mile radius from the primary practice location. A physician's covenant is void if the physician is involuntarily discharged without good cause. The changes apply to covenants entered into or renewed on or after September 1, 2025.
Tex. Bus. & Com. Code §§ 15.50(b), 15.50(d), 15.501; Acts 2025, 89th Leg., R.S., ch. 816 (S.B. 1318), § 4Choosing another state's law
The Texas Supreme Court has held that the law governing enforcement of non-competition agreements is fundamental policy in Texas. In that case it refused to apply the Florida law chosen in the agreement and judged the covenant of a Texas-based employee under Texas law. A governing-law clause naming another state should not be expected to rescue a covenant that fails the Texas statute.
DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990)Federal trade secret immunity notice
This point is federal law. An employer must include notice of the Defend Trade Secrets Act whistleblower immunity in any agreement with an employee, contractor or consultant that governs trade secrets or other confidential information. An employer that leaves it out cannot recover exemplary damages or attorney's fees under the federal act against that individual.
18 U.S.C. § 1833(b)Where people go wrong in Texas
- Relying on the generator's consideration recital, which names only employment and compensation and contains no express promise by the company to provide confidential information or training: for an at-will employee, the covenant becomes enforceable when the employer performs a promise of that kind, so the promise has to be added and then kept.
- Drafting the widest possible restriction and counting on a court to narrow it, which forfeits damages for conduct before the reformation.
- Using the generator's covenant for a physician, dentist, nurse or physician assistant: the draft has no buyout clause and does not apply the one-year and five-mile limits that Tex. Bus. & Com. Code §§ 15.50(b) and 15.501 require.
How the generator works
The core IP-and-confidentiality agreement every employee should sign. It assigns work product to the company, protects trade secrets, and handles restrictive covenants to the 2026 rules. Answer a short interview and the draft assembles as you go, with Texas already set as the governing state. Download it as PDF or Word. No fee. No account.
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