Articles Tagged with Noncompetition Agreements

Texas law generally disfavors contracts and arrangements that restrict competition and trade. The Texas Free Enterprise and Antitrust Act of 1983 provides says that “Every contract, combination, or conspiracy in restraint of trade or commerce is unlawful.” (Tex. Bus. & Com. Code 15.05(a).)

However, in typical fashion, the Texas Legislature has made certain exceptions to this general rule. Namely, they have made an exception by allowing non-compete agreements to be enforceable in certain limited circumstances: “notwithstanding 15.05 of this code … a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains 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 15.50(a)).

Non-Compete Agreements as Restraints on Trade