Texas Non-Disclosure Agreement (NDA) Review
In Texas, the NDA and the non-compete are often legally linked. Under Alex Sheshunoff v. Johnson (2006), an employer's promise to give you confidential information can be the very thing that makes a non-compete enforceable once that information is delivered. So a Texas confidentiality agreement may do more than protect secrets: it can be the foundation for a restriction on where you work next.
Trade-secret law
Uniform Trade Secrets Act
Bundled non-compete
Enforceable if reasonable
Confidentiality & trade secrets in Texas
Texas protects trade secrets under its version of the Uniform Trade Secrets Act, and the federal Defend Trade Secrets Act applies on top. A reasonable NDA is enforceable, but courts still look at scope, an over-broad definition of "confidential information" with no exclusions is the most common weakness.
Watch for a non-compete inside the NDA
Enforceable if ancillary to an otherwise valid agreement and reasonable in scope; courts will reform overbroad terms. Since September 1, 2025, SB 1318 limits physician and some other healthcare non-competes to 1 year and 5 miles.
A confidentiality agreement should protect information, not restrict who you can work for. If an NDA in Texas also tries to bar you from competitors or from soliciting contacts, treat that as a separate restrictive covenant and judge it by Texas's non-compete rules above.
How can a Texas NDA support a non-compete?
Business and Commerce Code 15.50 enforces a covenant not to compete that is ancillary to an otherwise enforceable agreement and reasonable in time, area and scope of activity. In Sheshunoff, the Texas Supreme Court held that an at-will employee's covenant becomes enforceable when the employer performs its promise to provide confidential information, even if that happens after signing. Texas courts reform overbroad covenants rather than voiding them.
If a Texas NDA promises you access to confidential information and also contains a restriction on competing, treat the two as working together.
What does TUTSA protect, and can you use anti-SLAPP to fight a claim?
The Texas Uniform Trade Secrets Act, Civil Practice and Remedies Code chapter 134A, took effect in 2013 and was amended in 2017. It covers information that derives value from secrecy and is protected by reasonable measures.
Before 2019, departing employees sometimes used the Texas Citizens Participation Act to seek early dismissal of trade secret and non-compete suits. The 2019 amendments (HB 2730) added an exemption in section 27.010(a)(5) for claims between employers and employees or contractors seeking recovery for trade secret misappropriation or to enforce a non-compete or non-disparagement agreement.
For a Texas employee the practical takeaway is simple: a confidentiality clause, a promise of access to secrets and a non-compete in the same document should be negotiated together, because the first two can make the third enforceable.
Texas sources checked 2026-10-09: Tex. Civ. Prac. & Rem. Code 27.010 (Texas Public Law) · Tex. Bus. & Com. Code 15.50 (Texas Public Law) · Tex. Bus. & Com. Code 15.51 (Texas Public Law) · Speak Out Act, Pub. L. 117-224 (congress.gov). Laws change; confirm the current rule before relying on it.
What ClauseAudit checks in a Texas NDA
- Definition of "confidential information", narrow, or everything?
- The four standard exclusions (public, already known, independently developed, third-party)
- Duration, a defined term, or a perpetual obligation?
- A "residuals" clause allowing use of what is remembered
- Any bundled non-compete or non-solicitation, judged by Texas law
- Return/destruction obligation and one-sided injunctive relief
Texas NDA FAQ
Is an NDA enforceable in Texas?
Yes, a reasonable confidentiality agreement is generally enforceable in Texas, backed by the state’s Uniform Trade Secrets Act and, at the federal level, the Defend Trade Secrets Act. What matters is scope: an NDA with an over-broad definition of "confidential information," no standard exclusions, or a perpetual term is far weaker than it looks and worth narrowing.
Can an NDA include a non-compete in Texas?
NDAs sometimes bundle in non-compete or non-solicitation language, and in Texas a reasonable non-compete can be enforceable, Enforceable if ancillary to an otherwise valid agreement and reasonable in scope; courts will reform overbroad terms. Since September 1, 2025, SB 1318 limits physician and some other healthcare non-competes to 1 year and 5 miles. A confidentiality agreement should not quietly restrict who you can work for, so flag any non-compete inside it.
What makes an NDA fair in Texas?
A sound NDA defines confidential information narrowly, includes the standard exclusions (public information, what you already knew, what you independently develop, and what a third party gives you), has a defined term rather than a perpetual one, and does not include a broad "residuals" clause or a hidden non-compete. ClauseAudit checks each of these against Texas law.
Can Texas enforce a non-compete buried in an NDA?
Texas is one of 34 jurisdictions where a non-compete is generally enforceable if reasonable in duration, geography and scope. Enforceable if ancillary to an otherwise valid agreement and reasonable in scope; courts will reform overbroad terms. Since September 1, 2025, SB 1318 limits physician and some other healthcare non-competes to 1 year and 5 miles. Confidentiality obligations are a separate question and are not affected by any of that, which is why a restraint tucked into an NDA deserves reading on its own terms rather than as part of the secrecy clause.
If the restriction in my Texas agreement is too broad, what happens?
Courts may rewrite an overbroad restriction to something reasonable. That cuts against you: an employer has little to lose by drafting wide, because a court can pare the clause back rather than discard it. Negotiating the wording before signing matters more here than in states where an overbroad clause simply fails.
Does it matter which state's law the agreement names?
It can, because Texas's neighbours do not all agree: Oklahoma (void). Which law applies turns on the governing-law and venue clauses and on where the work is actually done, so those two clauses are worth reading before signing an NDA.
Does Texas have a state law against harassment NDAs?
Texas relies mainly on the federal Speak Out Act, which makes nondisclosure and nondisparagement clauses agreed before a sexual assault or sexual harassment dispute unenforceable in that dispute. Settlement confidentiality agreed after a dispute arises is outside that rule, so the terms of a Texas settlement deserve close reading.
If my Texas NDA has a non-compete, will a court throw it out if it is too broad?
Usually not entirely. Section 15.51 directs courts to reform a covenant with unreasonable limits to make it reasonable and enforceable, although an employer that knowingly overreached may lose damages for breaches before reformation. Negotiating narrow terms up front is more reliable than hoping a court trims them.
Asked to sign an NDA in Texas?
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How neighbouring states treat restrictive covenants
Nationally: 4 jurisdictions treat employee non-competes as void, 13 allow them only in limited circumstances, 34 generally enforce them if reasonable.
Texas rules summarized as of October 2026; laws change. This is automated educational information, not legal advice. ClauseAudit verifies current Texas law when you run your NDA, and you should confirm anything critical with a qualified attorney.