If you've signed a non-compete agreement in Texas – or drafted one – you may think that the contract is written in stone. But that’s not quite right.
Under Texas law, a non-compete agreement must be reasonable in time, geography and scope of restricted activities. In other words, the agreement should not restrict the employee more than necessary to protect the employer’s legitimate business interests.
If an employer tries to enforce a non-compete agreement that is unreasonable, courts in Texas don’t simply choose between upholding a non-compete and voiding it. When a non-compete contains unreasonably broad restrictions, a Texas court is required by statute to rewrite it – narrowing the terms to make them enforceable rather than scrapping the agreement altogether.
This obligation, known as reformation, has significant consequences for both employers and employees, and understanding it could change how you approach a non-compete dispute.
The Law Behind the Non-Compete Reformation Rule
The Texas Covenants Not to Compete Act, codified in the Texas Business and Commerce Code, sets out the reformation requirement in clear terms. When a court finds that a non-compete covenant is ancillary to an otherwise enforceable agreement but contains unreasonable limitations on time, geographic area, or scope of activity, the “court shall reform the covenant to the extent necessary” to make those limitations reasonable – and then enforce the agreement as reformed.
The word “shall” matters here. Courts don’t have discretion to simply void an overbroad agreement. They must narrow it.
What Courts Actually Rewrite – and Why It Matters
Reformation, sometimes referred to as “blue penciling”, focuses on three dimensions of a non-compete agreement:
- How long it lasts;
- Where it applies; and
- Which activities it restricts.
Recent Texas cases illustrate just how courts actively exercise this power.
Geographic Scope: Tied to Where You Actually Worked
Texas courts have consistently held that a reasonable geographic restriction must be tied to the territory where the employee actually worked and had operational authority – not simply wherever the employer does business or wherever the employee learned something about the company.
In Hipps v. CBRE, Inc. (2024), Chris Hipps, a former senior managing director for the global commercial real estate services company CBRE filed an appeal when a trial court granted a temporary injunction, enforcing his former employer’s non-compete provision as written. The temporary injunction prohibited Hipps from working for any competitor anywhere in the world for twelve months, even though Hipp’s territory at CBRE had been largely confined to the Dallas-Fort Worth metroplex.
The appeals court agreed with Hipps, finding that CBRE’s global restriction was overbroad. Citing the established principle that a reasonable geographic restriction generally corresponds to the territory in which the employee actually worked, the court sent the case back to trial court with an order to reform the geographic scope of the non-compete and enforce the agreement as rewritten.
Scope of Activity: Restricting Activities Related to the Role, Not the Entire Industry
Courts also reform activity restrictions that sweep too broadly – for example, prohibiting a former employee from working for any competitor in any capacity, regardless of whether the new role resembles the old one.
The Texas Business Court’s 2026 decision in Galderma Laboratories, L.P. v. Erick Brenner illustrates this well. The court addressed a non-compete agreement for a senior executive who had served as General Manager of Galderma’s Injectable Aesthetics Division – overseeing a $1.8 billion portfolio with nationwide responsibilities. The court found a national restriction appropriate given his role, but reformed two provisions that went beyond what was necessary to protect Galderma’s legitimate interests.
First, it removed language that would have prohibited the executive from working for a competitor “in any capacity,” limiting the restriction instead to roles the same as or substantially similar to his prior responsibilities.
Second, the court struck a global geographic restriction, narrowing it to the United States. Although the executive had attended global forums and participated in cross-regional discussions, the court found that this demonstrated exposure to global initiatives – not operational authority or managerial responsibility for markets outside the U.S. Global exposure does not equal global responsibility for the purposes of geographic scope.
Duration: Courts Can Reform a Non-Compete That Lacks a Reasonable Time Limit
Texas law requires non-compete agreements to contain a reasonable time limitation. When a covenant lacks one entirely, a court must supply it – and that reformed restriction is the only one it will enforce.
Glattly v. Air Starter Components, Inc. (2010) illustrates this directly. The trial court found that a salesman's employment agreement functioned as a covenant not to compete but lacked a reasonable time limit. Rather than voiding the agreement, the court fulfilled its mandatory duty to reform it – limiting the employee from competing for two years. The court then issued an injunction enforcing the covenant as reformed.
In practice, however, non-compete durations are the variable that courts reform least often. While Texas law expressly mandates reformation of an unreasonable time period, Texas courts most frequently reform geographic scope or the scope of prohibited activities instead. This pattern reflects the fact that Texas employers tend to draft time periods within the one-to-five-year range that courts have repeatedly recognized as reasonable. An agreement with a two-year restriction in the wrong territory is far more common than one with a 15-year restriction in the right one.
For employers, the lesson is straightforward: if your agreement contains a defined, reasonable time period, the duration is unlikely to be the provision a court rewrites. The greater risk lies in geographic scope and activity restrictions that reach further than the employee's actual role. Those are the provisions courts are actively narrowing.
Reformation Can Happen Early – Even Before Trial
One of the most practical aspects of Texas’s reformation requirement is that it applies at every stage of litigation – including temporary injunction proceedings, which happen before the case reaches full trial.
If the non-compete agreement is overbroad but otherwise valid, the court can reform it and issue an injunction (a court order that prohibits someone from taking certain actions – such as working for a competitor) based on the reformed version, while the lawsuit is ongoing. This is a way for an employer to stop the harm while the full case is being resolved, rather than waiting months or years for a final judgment.
Employers: Enforcing an Unreasonable Non-Compete Agreement Comes with Consequences
Many employers draft non-compete agreements broadly on the theory that a wider net is safer. Not so, says Texas law.
There are consequences when a court is forced to reform an overbroad non-compete:
- The employer can no longer recover attorneys’ fees; and
- The employer can no longer pursue financial damages for breaches of the contract that occurred before the court rewrote the agreement.
The law limits your remedy, post-reformation, to injunctive relief only. In other words, an overly restrictive non-compete doesn’t just risk judicial rewrite; it strips away the financial remedies you can pursue in the event of a breach.
In a dispute where litigation costs are substantial, and the employee has been competing for months before a court reaches a decision, this limitation can be significant.
When Reformation Is Not Available
The mandatory reformation rule has limits. Courts can only reform a covenant not to compete that is ancillary to an otherwise enforceable agreement – meaning the non-compete must be connected to a valid underlying contract, supported by adequate consideration (i.e., something in return, such as specialized training or confidential information). If the foundational agreement itself is unenforceable, there is nothing to reform.
Courts have also declined to reform agreements when doing so would be futile. In Byun v. Hong (2022), the Tyler Court of Appeals refused to remand for reformation after determining that the non-compete had already expired by its own terms. Rewriting an agreement that has run its course serves no purpose, and courts won’t go through the exercise.
Other common scenarios where reformation may not be available include:
- Agreements signed without new consideration (such as an accompanying raise, promotion, or additional benefits).
- Non-competes that stand alone rather than as part of another valid agreement
- Situations where the employer materially breached the underlying employment agreement
Learn more about the requirements of an enforceable non-compete agreement in Texas.
What Reformation Means for Texas Employers and Employees
Both employers and employees tend to approach non-compete disputes with the same mistaken assumption: that the agreement either holds or it doesn't. In Texas, the answer is rarely that simple.
For employers:
Draft non-competes that reflect the employee’s actual role, work territory, and access to confidential information. Agreements that are broader than necessary don’t provide a bigger safety net – they expose you to litigation costs you can’t recover and eliminate your right to damages. Employers should also audit existing agreements, particularly those with automatic renewal provisions, to confirm compliance with current law.
For employees:
An overbroad non-compete is not automatically unenforceable in Texas – courts are required to narrow it if the employer sues you. Before assuming that an aggressive restriction can’t be enforced against you, talk with an attorney about what a reformed version of your agreement might look like and what risks remain. Challenging a provision in court does not guarantee freedom from injunction while the employer’s case is pending.
However, as with many things in law, a proactive employee may be able to avoid both the non-compete and the exposure. Talking to an attorney before you receive notice of the employer’s TRO application is key to successfully executing this strategy.
Talk to an Experienced Texas Non-Compete Attorney
Non-compete disputes in Texas hinge on the facts of the case – the employee’s actual responsibilities, the geographic territory they covered, the confidential information they accessed, and the employer’s legitimate business interests. Whether you’re an employer seeking to protect your business or an employee navigating a restrictive agreement, the outcome of a reformation analysis depends on those details.
The attorneys at Hendershot Cowart P.C. focus on Texas business and employment law, including non-compete enforcement and defense. We can review your agreement, assess how a court is likely to evaluate it, and help you understand your options before a dispute escalates.
Contact us to schedule a consultation.