Non-Solicitation Agreements in Texas: Enforceability Rules

Federal law does not directly regulate non-solicitation agreements. The Federal Trade Commission (FTC) enforces the Non-Compete Agreement rule under 16 CFR Part 910, effective January 5, 2024, which technically applies to non-solicitation provisions within non-compete agreements, but courts have disagreed on whether the FTC rule applies to standalone non-solicitation agreements. The rule generally prohibits non-compete agreements that prevent workers from pursuing lawful work unless the employer can demonstrate the agreement is necessary to protect legitimate business interests.

Most non-solicitation protections arise under state contract law and trade secret law. The Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836, provides federal protection for trade secrets but does not specifically govern non-solicitation covenants. State courts interpret non-solicitation agreements under state restrictive covenant doctrine, examining reasonableness in scope, duration, and geographic area. Employers may also seek federal remedies for misappropriation of trade secrets if a departing employee solicits customers using confidential information.

Texas recognizes non-solicitation agreements as enforceable restrictive covenants under Texas Business & Commerce Code Section 15.50(a), which permits courts to enforce a covenant not to solicit customers if the covenant is reasonable in duration, area, and line of business, and serves to protect the employer's legitimate business interests, including trade secrets, confidential business information, customer goodwill, and substantial relationships with existing or prospective customers.

Unlike non-compete agreements under Section 15.50(b), which face heightened scrutiny and specific time limits (typically two years maximum), non-solicitation agreements receive more favorable treatment in Texas courts. A non-solicitation covenant does not need to meet the narrow restrictions of Section 15.50(b) and can be enforceable even when a non-compete would fail. Employers need not prove that the restriction is necessary to prevent unfair or deceptive practices; proving protection of a legitimate business interest is sufficient.

Texas applies a reasonableness standard to the covenant's scope, duration, and territory. Courts examine whether the restriction is ancillary to a lawful purpose, is not greater than necessary to protect the employer's legitimate interests, and does not impose an undue hardship on the employee. Texas Business & Commerce Code Section 15.51 allows courts to reform an unreasonable covenant to the minimum extent necessary to make it enforceable, rather than striking it down entirely.

Key differences from federal baseline: Texas statute specifically authorizes non-solicitation agreements, provides a clear test for enforceability, and grants courts explicit reformation power. Employers are not required to meet the FTC Non-Compete Rule's heightened proof standard that the agreement is necessary to protect legitimate business interests (though Section 15.50 still requires protection of legitimate interests). Non-solicitation agreements in Texas can extend beyond the typical two-year window applied to non-competes, provided the duration is reasonable given the business context.

Non-solicitation agreements are not enforceable if they are unreasonable in duration, geographic area, or line of business, or if they fail to protect a legitimate business interest. Legitimate business interests recognized in Texas include trade secrets, confidential business information, substantial relationships with existing or prospective customers, and customer goodwill developed through business expenditure.

An exception applies when the covenant is ancillary to an unlawful agreement or purpose. If the underlying employment relationship or transaction is unlawful, the non-solicitation clause will not be enforced. Additionally, some courts have questioned whether a non-solicitation agreement can protect merely general business skills or personal relationships absent a legitimate interest in trade secrets or customer goodwill.

Texas recognizes that at-will employment does not automatically invalidate a restrictive covenant; the agreement's enforceability depends on the bargain struck and the legitimate interests protected. However, if an employee is terminated without cause shortly after signing a non-solicitation agreement, a court may view the contract as lacking consideration and refuse to enforce it.

Union and collective bargaining carve-outs apply if a non-solicitation provision is subject to a collective bargaining agreement; the union agreement may supersede an individual non-solicitation covenant. Agreements that improperly restrict an employee's statutory right to engage in protected activity (such as union organizing or statutory whistleblowing) are not enforceable to the extent they conflict with state or federal law protecting that activity.

Furthermore, if a non-solicitation agreement is vague, overbroad, or cannot be reasonably interpreted, courts may decline to enforce it. The agreement must identify the group of customers, clients, or prospective customers protected; an agreement protecting "all customers and potential customers in the United States" may be deemed unreasonable.

Step 1 — Document the violation. If you believe a former employer is violating a non-solicitation agreement by soliciting you or your customers improperly, gather all written communications (emails, text messages, social media messages) showing contact with customers, dates of solicitation, and evidence of what customer information or relationships the employer is leveraging. Keep records of customer accounts, project files, and any confidential information the departing employee possessed. If the violation involves customer lists or trade secrets, document how the information is confidential and the competitive harm. Save copies in multiple secure locations and note timestamps of discovery.

Step 2 — Understand the agreement's terms. Review the actual non-solicitation agreement signed by the departing employee. Identify the protected group (which customers, territories, time period, and lines of business). Determine whether the employee's conduct falls within the restricted activities. If the agreement is ambiguous, consult legal counsel to assess enforceability. Note whether the employee is being prosecuted or whether you are defending against a claim that the covenant is unenforceable.

Step 3 — Demand letter and negotiation. Before filing suit, consider sending a demand letter from an attorney stating the violation, the terms breached, and demanding cessation within a specified period (typically 10–14 days). This letter can establish the employer's awareness and intent, which may help in damages calculations or attorney's fee recovery. Many disputes settle at this stage if the covenant is clearly enforceable and the violation is plain. If negotiation succeeds, document the settlement in writing to avoid future disputes.

Step 4 — File suit for breach of contract in Texas state court. File in district court in the county where the employer is located or where the breach occurred (venue under Texas Civil Practice & Remedies Code Section 15.002). The lawsuit should allege breach of the non-solicitation covenant, identify the legitimate business interests protected, explain why the covenant is reasonable, and request injunctive relief (an order prohibiting further solicitation) and damages (actual losses, lost profits if measurable, or unjust enrichment). Include a request for attorney's fees if the agreement explicitly provides for them or if you prevail and the claim is found to be frivolous.

Step 5 — Seek preliminary injunction. Given the irreparable harm of ongoing customer solicitation, file a motion for preliminary injunction asking the court to halt the violation immediately while the case proceeds. The court will examine likelihood of success on the merits, irreparable harm, balance of equities, and public interest. This is often the most critical phase because stopping the solicitation quickly prevents further customer loss. Provide declarations or affidavits detailing specific customers approached and damages suffered.

Step 6 — Consult an attorney immediately. This situation requires a business litigation attorney licensed in Texas with experience in restrictive covenants and trade secret law. The attorney will assess enforceability, likelihood of success, damages strategy, and whether to pursue injunctive relief, compensatory damages, or both. If trade secrets are involved, the attorney may recommend filing under the Texas Uniform Trade Secrets Act (Texas Civil Practice & Remedies Code Chapter 134) to access enhanced damages (up to treble damages for willful and malicious misappropriation). For critical situations, engage counsel before any written response to the other party.