What specific requirements make a non-compete enforceable in Texas?
To be enforceable in Texas, the Covenants Not to Compete Act requires that the covenant must (1) be ancillary to or part of an otherwise enforceable agreement at the time the agreement was made and (2) contain limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee. TEX. BUS. & COM. CODE ANN. 15.50 (Vernon Supp. 1997). The enforceability of the covenant not to compete is a question of law for the court to decide. a. Limitations of Time The Texas courts have upheld restrictions ranging from two to five years as reasonable time limitations, but every case depends on its own facts. The nature of the business and the employee’s position in the company both may have an effect on a reasonable time limitation. b. Limitations of Geographic Area The Texas courts have stated that a reasonable area is considered to be the territor
