At its core, it defines a list or category of competitors the professional cannot work for within a specific geographical area for a certain period of time. It also commonly restricts the employee from using proprietary information to compete against the employer. 

Texas courts don’t automatically enforce noncompete agreements. And not every noncompete agreement survives scrutiny. Many fail because they’re too broad, disconnected from the work they are supposed to protect, or lack consideration.

However, Texas courts will enforce a noncompete agreement if it meets certain standards. And the outcome in Daily Instruments Corp. v. Heidt illustrates just how carefully courts consider them.

Facts Speak Magnitudes

At its heart, Daily Instruments Corp. v. Heidt is a story about a specialized engineering and manufacturing company based in Houston that brought in a recent graduate, Eric Heidt, with no background in reactor thermometry and trained him as a sales employee. Over time, that investment paid off.

Daily promoted Heidt to Regional Sales Manager, a high-level sales role that placed him in major international territories. The company required Heidt to work with local accounts, licensors, and global customers, giving him access to Daily’s most sensitive information. But that access wasn’t free. In exchange, Daily required Heidt to sign a noncompete agreement and a confidentiality agreement.

Eventually, WIKA Group, which had just acquired Gayesco and aggressively sought to expand its presence in the narrow reactor thermometry market, recruited Heidt. Aware of the risks the noncompete posed, Heidt sent the agreement to WIKA for review, pointing out the potential legal consequences of working for them. He insisted on indemnification if things went sideways, and WIKA agreed.

Before Heidt resigned, he requested updated internal records, including Daily’s detailed pricing logs and customer information. He connected multiple external storage devices to his work computer. He set deadlines for internal updates that he knew he wouldn’t be around to complete. 

Then he left. And he started sharing Daily’s pricing strategies and told WIKA how to undercut bids. He pinpointed Daily’s ongoing opportunities, redirected them, and shared customer contacts and internal insights that helped WIKA’s market strategy. Essentially, Heidt’s noncompete terms reflected the information he used to advantage WIKA.  

What Did The Court Rule?

First, it’s helpful to know that Texas doesn’t automatically enforce a noncompete agreement. Courts tend to view noncompetes as antithetical to trade because they can limit where people work and how businesses compete for talent.

Instead of banning them outright, Texas takes the middle ground, enforcing noncompetes only if they meet specific statutory requirements. In plain speak, that means employers must tie a noncompete to a real, enforceable agreement and limit the time, geography, and the type of work it restricts. When a noncompete restricts more than a company needs to protect a legitimate business interest, courts often refuse to enforce it.

In Daily Instruments Corp. v. Heidt, the court worked through Texas’s statutory test step by step and found that the facts lined up cleanly with each requirement.

Daily Tied the Noncompete to a Real Exchange

The first question the court examined was whether the noncompete was ancillary to an otherwise enforceable agreement. Or, in plain terms, whether Daily gave Heidt something meaningful in exchange for agreeing not to compete.

Given the facts, the answer was straightforward. Daily didn’t just hire Heidt; it trained him, promoted him, and opened the door to highly sensitive information, including pricing strategies, global customer relationships, and long-term bidding strategy.

In return, Heidt agreed not to use that knowledge to hurt the company. Ultimately, Daily tied the restriction to something the court believed was worth protecting.

The Agreement’s Limits Were Reasonable

From there, the court examined whether the agreement had a reasonable scope given Heidt’s actual position. The restriction lasted two years. And while a two-year restriction might be too long in one context, the court reasoned that in Daily, it was entirely appropriate. Heidt’s projects often took years to develop. Heidt also had access to valuable information throughout those projects. A shorter restriction would have expired before the information lost its value and thus wouldn’t have meaningfully protected Daily’s interests. Ultimately, the court ruled that two years was well within what Texas courts routinely uphold, especially for employees with access to long-term strategic information. 

The same reasoning applied to geography. Typically, a worldwide restriction raises immediate red flags. But the reactor thermometry market isn’t a typical industry. It is small, specialized, and global by nature. Thus, the court found that, though on paper, the geographic scope seemed sprawling—it covered the United States and any country Daily operated in—Heidt’s role was just as expansive. He handled international territories, worked with global licensors, and had access to worldwide sales data. In a small, global industry, narrowing the scope wouldn’t have reflected the reality of his outreach. And limiting the restriction to a single region would have left Daily exposed in the very markets Heidt influenced.

Finally, Daily never barred Heidt from working in the broader energy or chemical industries. The noncompete limited him from doing the same kind of work—selling reactor thermometry products—for a direct competitor, using the information he gained from working with the company: his specific knowledge of Daily’s products, pricing, and strategy. Plainly, Daily did not try to stop Heidt from earning a living but merely restricted him from using a specific knowledge set in a directly competing role.

All of this reinforces a broader point: courts don’t determine enforceability by how restrictive a clause looks on paper. They examine how well the restriction fits the facts. In this case, the fit was tailor-made. The noncompete’s duration, geography, and scope weren’t just abstract legal checkboxes but interconnected pieces that answered a question: Did the agreement target the true risk the employee presented?

Heidt’s Conduct Made the Case Stronger

If the agreement gave the court a legal basis to enforce the noncompete, Heidt’s conduct gave it a reason. Heidt actively used confidential information after he left Daily: sharing pricing data, advising a competitor on how to undercut bids, identifying opportunities his former employer was pursuing, and redirecting them. In this case, the court didn’t have to speculate. It had a clear record to turn to. Courts are more amenable to enforcing a noncompete when the employee’s actions demonstrate exactly why the restriction exists. Here, Heidt’s behavior didn’t just violate the agreement; it validated it.

The Harm Couldn’t Be Undone

Once the court found the agreement enforceable and that Heidt breached it, the remaining question was what remedy to apply. In this case, the loss of customer relationships, pricing advantage, and market position wasn’t easily quantifiable. Once a competitor has proprietary information, the damage spreads in ways that are hard to measure and cannot easily be reversed. The court recognized that reality and ruled that the only meaningful way to address the harm was to stop the conduct through an injunction.

So What’s the Takeaway?

Put simply, noncompetes succeed or fail based on how companies draft, support, and enforce them in practice over time and in real-world situations. In Daily Instruments Corp. v. Heidt, the court upheld the noncompete because all statutory conditions and elements were met. Neither the court nor Texas law had to stretch to enforce it. The agreement wasn’t overly broad. Daily tailored it to Heidt’s role, the industry, and the type of information the company trusted him with. And Daily backed it up by offering Heidt training, relationships, and exposure to information that had real competitive value. 

That alone would be compelling. But it was Heidt’s behavior that ultimately swayed the court. Immediately after leaving Daily, Heidt knowingly used confidential information to benefit a competitor, in direct violation of the clause. 

The larger takeaway from Daily is that courts don’t base noncompete enforceability on generalizations or abstract concepts. In practice, it’s cumulative. Daily appropriately tailored its noncompete. But the facts also really mattered. Taken piece by piece, from the agreement’s structure to Heidt’s job duties and his behavior that followed, the court had every reason to rule in Daily’s favor. In the end, Daily’s noncompete did what enforceable agreements are supposed to do: protect a specific business interest without blocking a professional’s future path.

Official Legal and Other Sources Used to Inform This Page

To ensure the accuracy and clarity of this page, we referenced official legal and other sources during the content development process

• Daily Instruments Corp. v. Heidt, 998 F. Supp. 2d 553 (S.D. Tex. 2014)
• Tex. Bus. & Com. Code § 15.50(a) Criteria for Enforceability of Covenants Not to Compete

The post Yes, Noncompetes are Enforceable in Texas (as evidenced by Daily Instruments Corp. v. Heidt) appeared first on Texas Noncompete Law.

If you have a physical therapist non-compete agreement in Texas, you might feel stuck in your job.

The terms of that agreement can affect your future. They can limit where you work, who you treat, and how you grow your career.

Understanding your rights can help you keep your career on track.

For assistance from an experienced Texas physical therapist non-compete lawyer, reach out to us online today.

Are Physical Therapist Non-Competes Enforceable in Texas?

While non-competes for physical therapists are enforceable in Texas, the agreement must meet specific legal requirements.

The non-compete agreement is enforceable only if it is reasonable in time, geographic scope, and the type of work restricted. These limits apply to any physical therapist non-compete and play a key role in whether the agreement holds up.

Further, the non-compete must also relate to a valid employment agreement. It must protect a legitimate business interest, such as patient relationships, confidential information, or specialized training provided by the employer.

If the agreement goes too far, a court may modify it. Take note, the court may still order limited enforcement of an overly broad non-compete agreement.

What Makes a Physical Therapist Non-Compete Clause Reasonable?

Courts examine the fairness of a physical therapist non-compete clause. The agreement must balance the employer’s need to protect its business with your right to work.

Three main factors determine whether a restriction is reasonable:

• Time limits—how long the restriction lasts must relate to the employer’s need to protect patient relationships;
• Geographic limits—the restricted area must reflect where you actually worked or treated patients; and
• Scope of work—the agreement should limit only the type of therapy work you performed.

You may challenge the agreement if any of these restrictions go beyond what is necessary.

How Can a Physical Therapist Non-Compete Affect Your Career?

A physical therapist non-compete can have a real impact on your professional options. It may limit your ability to accept a new position or continue treating patients in your community.

Common effects include:

• Restricted job opportunities. You may not be able to work within a certain distance of your previous employer, even if other clinics want to hire you.
• Loss of patient relationships. You may have to stop treating patients you have worked with for years, impacting your income and professional satisfaction.
• Delayed career growth. A restrictive agreement may force you to relocate or wait before advancing in your field.

Understanding these risks early can help you plan your next move more effectively.

What Should You Do Before Signing or Challenging an Agreement?

If you are dealing with a physical therapist non-compete agreement in Texas, it is important to review the details before making decisions.

You should take steps such as:

• Review the contract carefully. Look at the time, geographic, and scope limitations to understand how they apply to your situation.
• Compare the restrictions to your actual role. Courts often consider whether the agreement reflects what you actually did on the job.
• Seek legal guidance. An attorney can help you evaluate whether the agreement meets Texas legal standards or is overly restrictive.

Taking these steps can help you avoid surprises later.

Why Work with Our Firm on Non-Compete Issues?

Non-compete agreements can limit your career and finances. You need clear answers about your rights and options before taking action.

Wood Hammel LLP has deep experience handling non-compete disputes for employers and employees. Attorney Robert Wood has worked on Texas non-compete matters since 1994. He has helped thousands of clients resolve disputes involving restrictive covenants. Robert has also maintained his long-running non-compete blog, where he shares insights on how courts analyze and enforce these agreements.

The firm understands how to analyze non-compete agreements for Texas physical therapists. Whether you need to review an agreement, negotiate better terms, or defend against enforcement, we can help you move forward with a strategy that supports your goals.

Contact us today. We can help assess the options related to your physical therapist non-compete.

Frequently Asked Questions

Can a Court Modify a Physical Therapist Non-Compete?

Yes. Texas courts may modify a physical therapist non-compete clause if it is too broad. Instead of voiding the agreement, the court may narrow it to make it reasonable.

How Long Can a Physical Therapist Non-Compete Last?

The duration must be reasonable. Many enforceable agreements last between six months and two years, depending on the circumstances.

Do Non-Competes Apply If I Change Specialties?

It depends on the agreement. You may challenge the restriction if it goes beyond the type of work you performed.

Legal References Used to Inform This Page

To ensure the accuracy and clarity of this page, we referenced official legal resources during the content development process:

• Criteria for Enforceability of Covenants Not to Compete, Tex. Bus. & Com. Code § 15.50 (2025). 
• Procedures and Remedies in Actions to Enforce Covenants Not to Compete, Tex. Bus. & Com. Code § 15.51(c) (1993).

The post Physical Therapist Non-Compete Agreements in Texas appeared first on Texas Noncompete Law.

If you are signing or enforcing a restrictive covenant, you need clear answers about Texas non-compete limitations. A non-compete can affect your income, your workforce, and your long-term plans. Knowing where Texas law draws the line helps you act with confidence before a dispute escalates.

For immediate assistance, please don’t hesitate to send us a message today.

What Makes a Non-Compete Clause in Texas Enforceable?

Texas regulates restrictive covenants under the Texas Covenants Not to Compete Act. 

For courts to enforce a non-compete clause in Texas, the following three requirements must be present:

• It must be part of an otherwise enforceable agreement;
• Contain reasonable limits on time, geography, and activity; and 
• Protect a legitimate business interest such as goodwill or confidential information.

If a restriction exceeds what is necessary or reasonable, a court may modify or void it entirely.

What Are Texas Non-Compete Time Limits?

One of the most common questions involves Texas non-compete time limits. The statute does not set a specific number of months or years. Instead, courts look at reasonableness.

So, how long do non-competes last in real cases? Many enforceable agreements fall between six months and two years. The duration may depend on the employee’s role and access to sensitive information. A 20- or 30-year restriction would likely fail because it exceeds what most courts consider necessary.

When reviewing non-compete time limits, courts consider whether the duration is necessary to protect confidential information or customer relationships.

How Does Geography Limit a Non-Compete Clause in Texas?

Geographic scope forms another major part of Texas non-compete limitations. The restricted area must reflect where the employee actually worked or had influence.

For example, if a salesperson worked only in Dallas, a statewide or nationwide ban may be excessive. Courts expect geographic limits to match real business operations.

A narrowly tailored area increases the likelihood that a non-compete clause will withstand scrutiny.

How Narrow Must the Scope of Activity Be?

The scope of activity limits the type of work the employee can perform. Texas courts focus on whether the restriction targets the same kind of work the employee previously performed.

An agreement that bars someone from working in any capacity for a competitor may go too far. However, a clause that prevents soliciting the same clients or misusing confidential strategies may be reasonable.

What Changed for Physicians Under the 2025 Update?

As of 2025, Texas law imposes stricter requirements on physician non-competes. This includes mandatory buyout provisions and guaranteed access to patient lists.

The law now requires that these agreements protect continuity of care and allow departing physicians access to patient medical records. Courts scrutinize these agreements closely because they directly affect patient choice and public health.

When Should Employers or Employees Take Action?

If you are an employer, you may be reviewing a non-compete to decide whether it is strong enough to enforce. If you are an employee, you may be wondering whether the agreement actually limits your next job opportunity. In either situation, understanding Texas non-compete limitations is critical before taking action.

Employers should evaluate whether the agreement:

• Contains reasonable Texas non-compete time limits that match the employee’s role,
• Limits geography to areas where the employee actually worked, and
• Restricts only the type of activity necessary to protect goodwill or confidential information.

Employees should review whether the non-compete time limit is longer than necessary, the geographic scope extends beyond their actual territory, and the clause prevents them from working in a capacity unrelated to their prior duties.

Carefully analyzing these limitations early can clarify whether enforcement, negotiation, or legal challenge makes the most sense.

Contact Us for Help With Texas Non-Compete Disputes

Non-compete disputes require prompt, strategic action. You need counsel who understands both the statutory framework and the courtroom realities.

Our firm is a business litigation firm representing employers and employees across Texas. Our attorneys bring decades of combined experience handling restrictive covenant disputes and executive employment agreements in state and federal courts. The firm includes a Board-Certified labor and employment attorney and trial lawyers recognized by Texas Super Lawyers and Best Lawyers in America. We have handled cases before the United States Court of Appeals for the Fifth Circuit. We also advise businesses on risk mitigation.

Whether you need to enforce a covenant or defend against one, we can assess your position and develop a strategy aligned with your goals. If you have questions about Texas non-compete limitations, contact us online today to discuss your options.

Frequently Asked Questions

How Long Do Non-Competes Last in Texas?

The length of a non-compete depends on what the agreement says. However, Texas courts will only enforce a duration that is reasonable under the circumstances. Many enforceable agreements last between six months and two years, but the specific facts matter.

What Type of Non-Compete Clauses are Rejected?

Courts may reject or modify agreements that impose excessive time, geographic, or activity restrictions beyond what is necessary to protect legitimate business interests.

Are Physician Non-Competes Treated Differently?

Yes. Texas law imposes additional statutory requirements on physician agreements, including buyout provisions and protections for patient access.

Legal References Used to Inform This Page

To ensure the accuracy and clarity of this page, we referenced official legal and other resources during the content development process.

• Criteria for Enforceability of Covenants Not to Compete, Tex. Bus. & Com. Code § 15.50 (2025).

The post The Key Limitations on Enforceable Texas Non-compete Agreements in 2026 appeared first on Texas Noncompete Law.

Understanding the Texas breach of contract statute of limitations is critical for businesses and employees who believe an agreement has been violated.

If you wait too long to bring a claim, the court may dismiss it, even if the breach clearly occurred. Identifying the correct filing deadline early can make the difference between recovering damages and losing the right to pursue the claim. 

Learn how our experienced Texas breach of contract lawyers can assist you by filling out the online form today.

What Is a Statute of Limitation?

The statute of limitations first appeared in early Roman law. It later developed into the criminal and civil common law of England. The purpose of the statute of limitations in a breach of contract context is to limit the time a plaintiff has to bring a lawsuit. This is because:

This is because:

1. A plaintiff should pursue its breach claims with reasonable diligence,
2. A defendant might have lost evidence to disprove a stale breach claim, and
3. Long dormant breach claims can work an injustice on a defendant.

Essentially, the law will not award a plaintiff for “sandbagging” its breach claims, or failing to exercise reasonable diligence over its contracts.

Each state has its own statute of limitations period. They range anywhere between 3 and 15 years, depending on the particular state’s law. Thus, knowing what state’s law governs your contract is vital.

Texas law sets the deadline for most contract claims at four years, with courts applying this rule to many commercial agreements, employment-related contracts, and other business arrangements.

What Is a Breach of Contract?

A breach of contract occurs when a party fails or refuses to do something it has promised to do.  Understanding when the breach occurs is paramount. It is not necessarily when the other party fails to meet its ultimate obligation under the contract. Rather, it is a failure to do something it had promised to do under the contract. A recent case from the Dallas Court of Appeals illustrates this concept.

Example Texas Breach of Contract Case

In this case, a buyer (Buyer) of delinquent car loans sued the seller (Seller) for breach of contract. The Buyer claimed the breach occurred when the Seller did not deliver “account documents” within 10 business days of the “effective date.”  The effective date of the contract was June 28, 2007. Seller had until July 13, 2007, to meet its obligation. 

Accordingly, when the Seller did not comply on July 13, 2007, the statute of limitations began to run. Thus, the Buyer had four years (July 13, 2011) to bring suit for breach of contract. But the Buyer did not bring suit for breach of contract until January 3, 2012, well after the statute of limitations had passed. Nevertheless, the trial court awarded over $3 million in damages to the Buyer.

The Dallas Court of Appeals reversed. It held that the Buyer brought no evidence asserting that its breach of contract claim began to run on any date other than ten days after the “effective date” of the contract. Therefore, the Seller conclusively established that all claims for breach of contract were barred by the statute of limitations. The Buyer’s award of $3 million in damages was reversed.

Cases like this highlight how strictly courts apply the breach of contract statute of limitations Texas law requires. Even strong claims may fail if filed after the deadline. For that reason, businesses and employees often need to evaluate the timeline carefully before bringing or defending a claim.

Are There Exceptions to the Statute of Limitations for Breach of Contract in Texas?

Although the general rule provides four years, courts sometimes consider exceptions that may affect the statute of limitations. These situations depend heavily on the facts of each dispute.

Some circumstances that may affect the deadline include:

• Discovery rule. This doctrine may apply when the injury could not reasonably be discovered at the time of the breach. Courts may allow the limitations period to begin when the injury becomes discoverable.
• Fraudulent concealment. If one party hides the breach and prevents discovery, the court may pause the running of the limitations period.
• Continuing obligations. Contracts that require repeated performance may create separate breach dates if multiple obligations are violated.

These doctrines do not apply automatically. When they do apply, they can play an important role in disputes over the Texas breach of contract statute of limitations. 

Protecting Your Rights Under the Texas Breach of Contract Statute of Limitations

The concept of the statute of limitations is simple. However, the complexities of modern commercial life are not.  With that in mind, you must be aware that the law expects people to exercise reasonable diligence in bringing actions for breach of contract. 

Whether it is two private parties contracting or sophisticated businesspeople, the law holds both to the same duty, with very few exceptions.  Therefore, procrastinating on a breach of contract action, or simply failing to recognize it, can have serious consequences on your legal rights and remedies.

Protecting your rights often starts with recognizing a potential breach early and reviewing the timeline of events. Keeping records of communications, contracts, and performance under the agreement can help clarify when the breach occurred. 

Consulting a lawyer is another effective way to protect your rights. An attorney can evaluate the facts, determine how the breach of contract statute of limitations applies, and help you decide the best next step before the filing deadline passes.

Why Clients Turn to Wood Hammel LLP for Breach of Contract Cases

Wood Hammel LLP represents businesses and individuals in complex contract disputes across Texas. Attorney Robert Wood brings decades of experience handling breach of contract claims involving employment agreements, business relationships, and restrictive covenants. He is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Robert also received recognition from Texas Super Lawyers and Best Lawyers in America. 

With substantial experience in business litigation and appeals before the United States Court of Appeals for the Fifth Circuit, the firm can review your contract and analyze how the breach of contract statute of limitations in Texas applies to your situation.

Reviewing the facts early helps determine whether your claim falls within the statute of limitations deadline. Contact our office today to have your timeline evaluated and discuss the best course of action.

Legal References Used to Inform This Page

To ensure the accuracy and clarity of this page, we referenced official legal and other resources during the content development process.

• Four-year limitations period. Tex. Civ. Prac. & Rem. Code § 16.004 (1999).
• Cornell Law School, Legal Information Institute, Definition of breach of contract.

The post Texas Breach of Contract Statute of Limitations appeared first on Texas Noncompete Law.

Many wars have been fought in Texas courts over the enforceability of non-compete agreements.

But relatively few have been waged over the enforceability of Texas non-disclosure agreements.

The reasons for this are many, including the fact that Texas courts have routinely held that, unlike noncompete agreements, nondisclosure agreements do not restrain trade; hence, they are far more enforceable.

Also, litigation over nondisclosure agreements has been relatively sparse because these agreements typically only require a departing employee to refrain from using or disclosing his former employer’s trade secrets. Nondisclosure agreements typically do not prohibit an employee from competing.

But what if a nondisclosure agreement goes too far?

What if the wording of a nondisclosure agreement is so broad that it is, de facto, a noncompete agreement? In that case, would the usual deference given to nondisclosure agreements apply?

For example, consider a Texas non-disclosure agreement that prohibits an employee from:

• Using or disclosing their former employer’s trade secrets; and
• Using or disclosing knowledge gained while working for the employer.

Would a clause like that be as enforceable as a run-of-the-mill NDA?

Our experienced Texas contract lawyers will explain what you should know.

What Defines a Texas Non Disclosure Agreement?

The first step in answering this question is to examine how courts have defined nondisclosure agreements. As one Texas court put it, “Nondisclosure covenants prevent the disclosure of confidential information and trade secrets.”

Another court noted, “Nondisclosure covenants do not necessarily restrict a former employee’s ability to compete with the former employer by using the general knowledge, skill, and experience gained from his or her work experience.”

As these cases acknowledge, a nondisclosure agreement is designed to protect a company’s confidential information and trade secrets from being used against it—it is not designed to keep a former employee from competing by using his general knowledge and skills.

The Impact of Having Overly Broad Texas Non Disclosure Agreement

If an NDA is so broad that it “has the practical effect of prohibiting the former employee from using, in competition with the former employer, the general knowledge, skill, and experience acquired former employment,” it may be held to be a noncompete agreement.

This is because a nondisclosure agreement that exceeds protecting trade secrets and confidential information may restrain trade like a noncompete.

Why Does It Matter if a Nondisclosure Agreement Is a de Facto Noncompete?

If a Texas court construes an agreement as a legitimate NDA, it will almost certainly enforce it. Texas courts have consistently held nondisclosure agreements to be enforceable. Conversely, noncompete agreements, to be enforceable, must meet the strict requirements of Tex. Bus. & Comm. Code § 15.50.

For example, a noncompete agreement must be reasonable in scope. If an employee convinces a court that a nondisclosure agreement prohibits him from using his “general knowledge and skills,” the court may treat the nondisclosure as a noncompete agreement. Under the statute, an overly broad noncompete agreement must be reformed to make it reasonable.

So what?, an employer might ask.

Here’s why it matters: Under the Texas statute, if the court is required to reform a noncompete agreement to make it reasonable in scope, no damages can be recovered (on a breach of contract theory) based upon pre-reformation violations of the agreement.

From the perspective of the employee who is being sued, reformation of an overly broad agreement is a “get out of jail free” card—it wipes away what has happened in the past (on a contract theory; obviously, if the employer can make a tort theory, like trade secret theft, that’s a different matter).

Thus, if an employer wants to maintain its right to recover damages for breach of a nondisclosure agreement, it should ensure that the agreement is reasonable in scope at the outset. The employer does not want the the court to have to reform its covenants because they are too broad.

The Jist: Overly Broad Texas NDA’s Are Not Always Better

In the realm of noncompete and nondisclosure agreements, “more” is not always better. Employers have an incentive to draft reasonable covenants so that the court will not have to reform them.

If a court has to reform an overly broad covenant, it can have the effect of absolving the employee of wrongs that occurred before the reformation happened.

Therefore, precision in the drafting of these agreements is extremely important.

Contact an Experienced Texas Contract Review Lawyer

Texas non-compete and non-disclosure agreements can be more restrictive than they appear at first glance. Speaking with a lawyer can help you clarify your obligations and move forward with confidence.

Contact us today for assistance.

The post When is a Texas Non-Disclosure Agreement Actually a Non-Compete? appeared first on Texas Noncompete Law.

Physician employment agreements are very prevalent.

Unlike most Texas employees who are employed on an at-will basis, physicians typically have written agreements that can be worth hundreds of thousands, if not millions, of dollars.

In our practice, we see many disputes between physicians and their employers from both sides of the fence.

Quite often these disputes are between practices or institutions and doctors who are just “hitting their stride,” developing loyal patients and looking at their practice options for the future.

At that point, both parties search for the contract they signed and put in a drawer a few years earlier and begin examining its arcane phrases with a scanning electron microscope.

The eventual terms of any agreement between a doctor and his or her employer depend on many factors, including the respective bargaining power of the parties. We thought it would be helpful for you to have a road map of the terms you are likely to encounter in your first agreement.

Like any document prepared by a lawyer, there is some fine print at the end. In the meantime, give some thought to these items (which by no means exhaust the important provisions of an employment agreement) before you make your first commitment as an employee.

For assistance, please don’t hesitate to contact an experienced physician employment contract lawyer today.

How Long is the Contract?

What is the duration – called the “term” – of the contract?

This is the duration of your employer’s commitment to you, and yours to your employer. Is it long enough to allow you to establish your practice? Is it so long that you would be unfairly stuck with a fixed compensation structure while your practice grew? Does the contract automatically renew at the end of the initial term and keep renewing (usually for a year at a time) unless one side cancels with notice (called an “evergreen clause”) – which can be both good or bad, depending on how the contract handles it?

Compensation and Incentive Structure

How is your compensation set? Is it tied to performance? If so, does the physician employment contract fairly allow you some influence on your performance goals and your employer’s support in meeting them? This tends to be a business term heavily influenced by market factors, but you still need to ensure that your future employer gives you a fair shot to maximize your income.

Review incentive compensation and bonuses. When are they paid? What offsets will the practice take for expenses (such as technicians and nursing staff)? If you leave before you receive a bonus, are you entitled to a pro rata share of the bonus or incentive compensation?

What Will You Pay Out-of-Pocket?

You will have a lot of expenses. Most employers pay or reimburse the basics, but consider some unusual expenses, such as costs associated with providing services at multiple locations, and don’t forget necessary certifications and continuing medical education. Don’t assume that your employer will pay all expenses of you being a doctor – get it clear up front.

Vacation Policy

Is there a paid vacation policy? What if you can’t or don’t choose to take all your paid vacation? Will the days roll over to the next year, or can you cash out your unused days?

Sick Leave/Personal Time

What does your employer provide if you are temporarily disabled due to injury or illness? Does the agreement define the term “disability”? If you are disabled, how long will you receive your base compensation? If you have minimum collection requirements in your contract, can this be adjusted to take into consideration a decrease in productivity due to a temporary disability?

What Are Your On-Call Obligations?

Are your “on call” coverage obligations clearly spelled out? Is call limited to specified locations?

What if Your Contract Doesn’t Go to Term?

Yes, it happens. That great relationship at the outset of your employment can sour for a multitude of unforeseeable reasons.

What conditions allow you or your employer to end the physician employment agreement before the end of its term?

The procedures are critical here. This is a major source of litigation, as are:

Noncompetition Agreements

The hands-down winner in the I-guess-I-need-to-call-a-lawyer sweepstakes is the famous “covenant not to compete” provision, sometimes shortened to “noncompete.” This is a provision that limits (but does not entirely prohibit) an employee’s ability to work elsewhere after the employment ends or is terminated.

Some doctors are under the misimpression that these provisions are not enforceable in Texas because they are anticompetitive. Not true.

It is true that there are special conditions imposed upon them in Texas, but if those conditions are met, courts will enforce contract provisions that keep you from practicing within a certain geographical area for a certain period of time after your employment ends.

The good news is that there are ways to limit the effect of such provisions.

Partnership

If your employer is a medical practice, consider requiring a commitment on its part to consider you for partnership (or whatever form of ownership the practice uses) after a certain period of time.

Your Patients’ Records

Your contract may end or your contract may be terminated prematurely. Either way, if you have your own patients you are going to want their records. You need to provide for that in the agreement.

What if Laws and Regulations Change?

With federal law and regulation changing rapidly with respect to matters such as record keeping, reimbursement, and even compensation itself, employers have begun inserting provisions permitting them to make unilateral changes to the contract to keep it in compliance with law. Sounds reasonable, but you should have notice of the change and the opportunity for input (or the option to bail out).

Malpractice Insurance

Yes, your employer will provide it, but it’s more complicated than that – what happens when your employment is over? This issue is of particular importance with respect to your second employer and something called tail insurance. Big-dollar item.

Dispute Resolution

If you have a dispute over the terms of the employment agreement, how will it be resolved? Frequently (and, in the case of hospitals, almost always) employment agreements provide for mandatory arbitration (that is, the parties cannot go to court; the dispute is heard by a non-judge with no jury). Does the contract provide that both sides must conduct a face-to-face meeting before initiating legal proceedings? Is there a provision requiring the loser to pay legal fees, and, if so, which side does it favor?

Two Sides to Every Story

We have focused here on things that the new doctor is going to want. Your employer is going to want some things, too, and it’s going to insist on them: Getting and keeping your license; maintaining your privileges at hospitals; abiding by the rules and regulations of the practice or institution; complying with legal requirements; and many more.

Still, you want to make sure your employer doesn’t slip in anything unreasonable or phrases it in such a way that it turns out to be at “gotcha” at some later date.

Contact an Experienced Physician Contract Attorney

As noted, this list only hits the highlights. There are many other possible provisions the new employee should carefully heed.

Learn how we can assist you by contacting our firm today.

Browse more physician employment contract articles, written by Attorney Robert Wood:

• 10 Tips for Negotiating Your Physician Employment Contract
• Texas Physician Contract Review Lawyers
• Texas Physicians: Major Update to Noncompete Law Takes Effect September 1, 2025
• Buyout Options are Mandatory Under Physician Noncompete Statute in Texas
• Do All Physician Non-Competes in Texas Require a Buyout Provision?
• Lack of Buy-Out Provision Kills Physician Noncompete Agreement

The post Physician Employment Agreements in Texas appeared first on Texas Noncompete Law.

Whether you’re an experienced physician or just out of residency, you should know how to negotiate a proper employment contract.

Unfortunately, many physicians make serious mistakes when negotiating the terms of their employment, thereby putting themselves in a vulnerable position.

Negotiating a physician employment contract is a deeply complex process. To protect your legal rights and financial interests, it is highly recommended that you work with a skilled professional.

In this article, our physician contract attorneys offer the top physician contract negotiation tips that you need to know.

1. Hire an Experienced Physician Contract Attorney

In far too many cases, physicians end up with unfavorable terms in their contract because they failed to consult with an attorney before negotiating and signing their employment agreement.

It is important to remember that physician contracts are complicated. Employers always work with legal counsel in negotiating and structuring these agreements. There is no reason to go through this alone; you should have your own legal professional by your side.

2. Do Not Wait Too Long to Seek Legal Guidance

Current or prospective physicians who are considering accepting a position with a new employer should speak to a physician contract lawyer immediately before starting any negotiations.

Your attorney can help you reach an agreement with the best possible terms for your specific interests and needs.

While an employment attorney can also be helpful in the contract review stage, the earlier you get legal counsel involved in your case, the better your negotiating position will be.

3. Know Your Goals and Know the Market

When negotiating a physician employment contract, it is crucial that a medical professional understands their own value. To get full value and fair contract terms, you need to know your market. What contract terms are important to you? What other options are the available to you?

With full information in mind, you can have the clarity you need to effectively work with an attorney who can negotiate a physician employment contract that is truly the best fit for your goals.

4. Know the Conditions of Your Employment

In negotiating a physician contract, it can be easy to let your focus drift to your compensation and benefits. To be sure, compensation and benefits are both important factors, and both deserve your attention.

At the same time, you should not overlook other key issues. Be sure to review the specific terms of your employment. You have the right to negotiate these terms as well.

Everything from emergency room hours and appointment times to office responsibilities and the availability of support staff are valid issues worth consideration and negotiation.

5. Be Sure to Get Everything in Writing

Under Texas law, employers can be held to verbal promises. However, enforcing an oral contract is far more challenging that enforcing a clear, well-drafted written agreement.

If certain contract terms are important to you, then you need to get those terms in writing.

The best way to avoid disputes and protect your interests is to have a carefully structured, written agreement that your physician contract attorney negotiates and reviews.

Do not rely on verbal statements.

6. An Offer Letter is Not Finalized

In many cases, physicians will receive an offer letter from a prospective future employer relatively late in the negotiation and application process. No matter how late you receive an offer letter, please remember that an offer letter is not final. Until you sign an agreement, you still have the legal right to negotiate the specific terms of the contract.

If your offer letter requires a quick response, consult an experienced physician contract review attorney immediately.

You may still be able to modify the terms of the deal.

7. Beware of Termination Clauses

Proper physician contract negotiation requires careful analysis and discussion of any termination clauses. A ‘great’ physician contract may not be very good at all if the employer can terminate the agreement at virtually any time and for virtually any reason, with limited notice.

If you are moving yourself and your family to a new location, you need to be sure that the deal comes with a basic level of security.

8. Watch Out for Restrictive Covenants (Non-Compete Clauses)

Under Texas law, a non-compete clause can be enforced as long as it is properly structured. This is a big issue for physicians because employers will often try to include non-compete provisions in these types of employment contracts.

Before you sign an agreement, please think very carefully about the non-compete terms. You never know how long you will end up working for this employer. Be sure that you are not agreeing to an overly restrictive non-compete agreement.

In addition, if you are willing to sign a non-compete, ensure you are getting fair value for your sacrifice.

9. Think About Malpractice Insurance

When practicing medicine in the United States, you need to be sure that you have adequate legal and financial protection. You should negotiate a physician contract that offers sufficient medical malpractice coverage.

You must carefully review the contract to determine the scope of malpractice insurance coverage provided in the agreement.

It’s important to avoid leaving yourself exposed to unnecessary risk.

10. Know Your Bonus Terms

Before signing the agreement, make sure you fully understand the compensation package offered in your physician employment contract.

Among other things, this means understanding the bonus terms. You do not have to accept the terms proposed by the employer. In many cases, physician contract attorneys can negotiate more favorable bonus terms for their clients.

Contact Our Dallas, TX Physician Contract Attorneys Today

At Wood Hammel LLP, our Texas employment law lawyers have extensive experience negotiating physician contracts. To get immediate assistance from our legal team, please contact our law firm today for a confidential case evaluation.

From our office in Dallas, we represent clients throughout North Texas, including in Fort Worth, Arlington. Irving, and Plano.

Related Posts:

• Physician Employment Agreements in Texas (3/8/2026)
• Texas Physician Contract Review Lawyers (1/6/2026)
• Texas Physicians: Major Update to Noncompete Law Takes Effect September 1, 2025 (6/25/2025)
• Buyout Options are Mandatory Under Physician Noncompete Statute in Texas (1/15/2023)
• Do All Physician Non-Competes in Texas Require a Buyout Provision? (12/29/2016)
• Lack of Buy-Out Provision Kills Physician Noncompete Agreement (1/10/2014)

The post 10 Tips for Negotiating Your Physician Employment Contract appeared first on Texas Noncompete Law.

1. Term of Employment

Employment agreements are typically either for a fixed term or are at-will. An at-will agreement, obviously, can be terminated by either party at any time for any reason. Some executive agreements contain “Evergreen” provisions, which state that the term of the agreement shall be automatically extended unless one of the parties notifies the other of its intention that the agreement expire at the end of the then current term (with such notice typically being due thirty or sixty days before the end of the term). 

Moreover, some employment agreements that are purportedly for a fixed term (e.g., a one-year term) also contain provisions pursuant to which the employer may terminate the employee “for any reason” on shorter notice (e.g., “thirty days’ notice”)—such an agreement is in reality a 30-day employment contract.

2. Position, Job Duties, Location

Employment agreements routinely contain provisions outlining what the employee’s title will be, what his duties will be, to whom he will report, where he will work, etc. From the employee’s perspective, it is important that these terms be fairly well defined. 

For example, does the agreement:

• Allow the employer to transfer the employee out of state, or are there restrictions on their ability to do so? 
• Permit the employer to alter the employee’s job duties, or to change the person to whom the employee reports? Especially from the employee’s perspective, it is important that the executive employment agreement define these terms with some precision.

3. Compensation

Employment agreements typically reference some guaranteed compensation (e.g., salary) and some discretionary compensation (e.g., bonuses and stock options). On the guaranteed part, employees need to know whether they are to be classified as “exempt” under the FLSA or non-exempt. Employees need to know what must occur for the bonus to be paid. Is payment of the bonus totally discretionary? Does it depend upon the company’s performance, or the employee’s performance, or both? Stock options are often governed by a separate plan and the employee should understand its terms.

4. Termination for Cause

Employment agreements often provide that an employee may be terminated for “cause,” and “cause” is defined to include various acts or omissions by the employee. Some of the acts—such as commission of a felony, or embezzlement of company funds—are fairly easy to understand. However, defining “cause” to include the employee’s failure to perform her job duties may be somewhat problematic from the employee’s perspective, because whether the employee is performing well can be subjective. Generally, employees want what constitutes “cause” to be defined as precisely as possible. Even in an at-will employment agreement, whether “cause” exists can be relevant for other reasons—e.g., whether the terminated employee is eligible to receive severance benefits.

5. Termination for Good Reason

Employment agreements for a specified term often set forth situations in which the employee may voluntarily resign. “Good reason” for the employee to terminate might exist where the employee is demoted, or his pay is cut, or he his transferred. Again, even in at-will employment situation, the concept of termination for “good reason” might be relevant to whether the employee receives severance benefits.

6. Nondisclosure Agreements

Employment agreements routinely contain provisions prohibiting the employee from disclosing the employer’s confidential or proprietary information to a third party. An employee needs to know what information the employer considers to be confidential or proprietary.

7. Noncompete Agreements

Especially for salespeople, executives, or managers, employment agreements can contain provisions limiting an employee’s right to compete with the employer, both during and after employment. The provision usually will specify certain activities in which the employee may not engage, and will typically contain a geographic scope as well. The employee will want to fully understand how long the non-compete lasts, and what it precludes the employee from doing (both in terms of the activities to be restrained and the geographical scope of the restrictions).

8. Nonsolicitation Agreements

Along with noncompete provisions, executive employment agreements often contain provisions prohibiting the employee from soliciting the employer’s customers, or its employees, or its vendors. In Texas, these provisions can be enforceable, but they are held to the same standard to which noncompete agreements are held—i.e., the employer must give consideration to the employee (such as confidential information) that justifies the nonsolicitation provision, and the provision must be reasonable in scope.

9. Change in Control

What happens if the employer is purchased by another company? Should that affect the employee’s obligations? Should the employee be able to escape his noncompete and nonsolicitation obligations? On a related note, should the employer be able to assign the agreement to another company (so that the “new” company can enforce the employee’s noncompete and nonsolicitation obligations)? Employment agreements don’t always address these issues, but employees are wise to think about them.

10. Arbitration

Many employment agreements now require disputes between employers and employees to be resolved through binding arbitration rather than court.

Provisions like this can be one-sided (i.e., sometimes, only the employee is required to arbitrate its disputes, whereas the employer can go to court). Employers need to be mindful of the effects of agreeing to arbitrate disputes as opposed to litigate them.

11. Choice of Law and Forum Selection

Employment agreements usually specify the governing law and sometimes the required venue for disputes. The latter can be costly if it forces an employee to sue in another state.

The post Texas Executive Employment Agreements: Checklist for Employees appeared first on Texas Noncompete Law.

This vendor list is often built over years and identifies suppliers known for providing quality products at good value.

Arguably, this information qualifies as a trade secret because it was developed through years of trial, error, and financial investment.

In a separate post, we discussed the likely use of common law factors in identifying trade secrets under the Texas Uniform Trade Secrets Act. Under the common law, Texas courts utilized a six factor test to determine whether something was a trade secret. 

What are the Factors in the Six-Factor Test for Trade Secrets?

Those factors are:

1.  The extent to which the information is known outside the employer’s business;
2.  The extent to which it is known to employees and others involved in the employer’s business;
3.  The extent of the measures taken by the employer to guard the secrecy of the information;
4.  The value of the information to the employer and its competitors;
5.  The money or effort expended by the employer in developing the information; and
6.  The ease or difficulty with which others might properly acquire or duplicate the information.

While the Texas Uniform Trade Secret Act explicitly replaces the common law, other states’ courts with similar statutes have still drawn from the common law by using these six factors. Should Texas follow these states, recent Texas case law applying the common law factors indicates that your company’s list of vendors/suppliers may be entitled to trade secret protection.

Texas Court of Appeals Recognizes Vendor List as Trade Secret Under Six-Factor Test

In a recent Texas Court of Appeals case, the court examined whether a company’s vendor list qualified as a trade secret. It did so to decide if the information was protected from discovery under the trade secret privilege.

The company seeking the trade secret protection was part of the salon haircare product diversion industry. Within that industry, companies divert products outside of their normal, authorized, distribution channels.

Due to the nature of the industry, product supply is limited, making supplier identities more valuable.

The company seeking protection established the following:

• It had been in the business for 25 years,
• Developed its contacts and sources through substantial effort and expertise,
• Its contacts/suppliers were not readily known to the public or the industry itself,
• Its suppliers were the most valuable part of its business, and
• The suppliers’ identities were only known by a few people within the company.

After reviewing this evidence and weighing the six common law factors, the court found the company’s supplier information was a trade secret. It was therefore protected under the trade secret privilege.

While this case did not involve a misappropriation of trade secrets claim, it did firmly establish that, under the six factor test, a vendor can, in fact, be a trade secret. 

However, the protection available for you and your business depends greatly on how well you protect the information. It also depends on the value of the information you seek to protect.

Contact Our Texas Business Lawyers for Assistance

At Wood Hammel LLP, our attorneys are up-to-date on the law pertaining to all avenues available for protecting your business’s confidential information and trade secrets. Whether or not your business is facing a breach of your confidential and proprietary information or wanting to prevent a future one, our attorneys can counsel you as to the best options for your company.

Reach out to us online today to schedule a consultation.

The post Are Vendor Lists Considered Trade Secrets in Texas? appeared first on Texas Noncompete Law.

Injunctive Relief in Texas Non-Compete Cases

An employer may be entitled to injunctive relief to enforce a non-compete agreement in Texas.

To obtain permanent injunctive relief, it’s not necessary to prove that, without an injunction, the promisee will suffer irreparable harm. But that is not the case with respect to temporary injunctive relief.

Most courts require proof of irreparable harm to obtain a temporary injunction for a non-compete violation. Irreparable harm means harm that cannot be adequately compensated by monetary damages.

Proving Irreparable Harm for Temporary Injunctions

Irreparable harm may exist if damages are hard to quantify or cannot be compensated.

Threatened disclosure of trade secrets to a competitor can constitute irreparable harm, especially if it’d give the competitor an advantage.

Moreover, proof of a continued breach of a non-compete agreement by a highly-trained employee may constitute irreparable harm. In determining whether to grant temporary injunctive relief, the court must balance probable harm to the employer if the injunction is not issued with probable harm to the employee if it is.

Damages for Breach of a Non-Compete Agreement

In addition to injunctive relief, a court may award damages resulting from breach of a non-compete covenant. Awardable damages might include lost profits resulting from the departing employee’s breach of the noncompetition agreement. A non-compete agreement can contain a liquidated damages provision, but the provision must constitute a reasonable forecast of just compensation for the harm caused by the breach.

Reformation of Overly Broad Non-Compete Agreements

If the court holds that the scope of the non-compete agreement is too broad (e.g., if the court holds that the geographic scope should be limited to Dallas/Fort Worth rather than to all of Texas), it will reform the scope to make it reasonable. However, if reformation of the scope is required, damages may only be awarded for “post-reformation” violations.

For this and other reasons, an employer is incentivized to ensure that the scope of a non-compete agreement is reasonable.

When Employees Can Recover Attorney’s Fees

Attorney’s fees and costs may be awarded to the promisor (employee) if he proves that the:

• Scope of the covenant is unreasonable,
• Employer knew at the time the agreement was signed that it was unreasonable, and
• Employer has attempted to enforce the covenant to a greater extent than necessary to protect its goodwill or other business interests.

Texas courts also hold that an employee who seeks a declaration that a noncompete is unenforceable may recover attorney’s fees. This is allowed under the Texas Declaratory Judgment Act.

Can Employers Recover Attorney’s Fees?

There is no provision in the non-compete statute for an employer who successfully prosecutes an action against an employee to recover attorney’s fees. At least one Texas court of appeals has held that the non-compete statute’s silence on this issue precludes an employer from recovering its fees under the statute (or any other applicable law). However, another Texas court has permitted an employer to recover its fees under the Texas statute allowing the prevailing party in a contract dispute to recoup its attorney’s fees.

Contact an Experienced Texas Non-Compete Lawyer

Learn how our attorneys can assist you by submitting our online form today.

The post Available Remedies in Texas Non Compete Cases appeared first on Texas Noncompete Law.