The Renaissance of Noncompetition Agreement
In Texas, the enforceability of noncompetition agreements ("noncompetes") has widely varied. By the end of the 1980s, noncompetes were highly disfavored by Texas courts. The Texas Legislature responded with the Texas Covenants Not to Compete Act. (Tex. Bus. & Com. Code § 15.50-52), which was intended to favor noncompetes. That Act required enforcement of noncompetes so long as they are (1) ancillary to an otherwise enforceable agreement, (2) serve a legitimate business purpose, and (3) contain reasonable limits as to time, and geography and scope of activity restricted.
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