Texas is a blue line state when it comes to the enforcement of non-compete agreements. What does this mean? It means that courts can perform or rewrite non-compete agreements so that they are enforceable under Texas law. What this really means is, the judge can rewrite the contract to a form that he or she thinks is palatable and fair.
In some states, the blue line does not apply. This means that if the court finds a non-compete is overly broad or unenforceable, there is no way to enforce the agreement and the parties can operate as if it never existed. In Texas, employers who may be concerned about the enforceability of a non-compete should always remember that they will be in a position in litigation to request that the court re-form the agreement to make it enforceable. This usually takes the form of the declaratory judgment action and could potentially give rise to attorneys’ fees.
