By Amanda Leon, founder of OilMoney.io. Houston-raised, came up in the Houston marketing team of Vallourec, and has run Unrth, a brand and growth studio for oil and gas and industrial companies, since 2017, with her boots on client locations in Midland and Odessa. Last reviewed November 5, 2026.
Yes, a non-compete can hold up against an oilfield sales rep in Texas. Under state law it is enforceable if it is part of an otherwise enforceable agreement and its limits on time, geography, and scope of activity are reasonable. If a court finds the limits too broad, it doesn't have to throw the agreement out. It is required to narrow it and enforce the narrower version. And the federal ban you may have heard about never took effect. So read yours before you give notice, not after.
This page explains public law in plain words. It is not legal advice, and I'm not a lawyer. Your agreement's exact words matter, so have a Texas employment lawyer read it before you act on it.
What the Texas Statute Says
The rule is in Section 15.50 of the Texas Business and Commerce Code. Boiled down, a covenant not to compete has to clear two bars:
It has to attach to a real agreement. The law says it must be ancillary to, or part of, an otherwise enforceable agreement at the time that agreement is made.
Its limits have to be reasonable. Time, geographic area, and scope of activity can't impose a greater restraint than necessary to protect the employer's goodwill or other business interest.
For a sales rep, those three limits are where the fight usually is. Two years sounds different from six months. The Midland Basin sounds different from the whole United States. And a ban on selling the same product line sounds different from a ban on working for any company in the industry, in any job.
What Your Employer Can Point To
The Texas Supreme Court's 2011 decision in Marsh USA Inc. v. Cook is the one to know. An employee signed a non-compete in exchange for stock options. The court held that stock options can support the covenant because they are reasonably related to protecting the company's goodwill, which the statute treats as worth protecting. It also noted that it has repeatedly treated goodwill, trade secrets, and other confidential or proprietary information as protectable business interests.
That matters in the oil patch, where the value of a rep is often the relationships and the account knowledge. If you got equity, a retention deal, customer lists, pricing, or specialized training around the time you signed, ask your lawyer how that affects your agreement.
Who Has to Prove What
Section 15.51 sets the burden. If the main purpose of the agreement is to have you perform personal services, as a typical employment agreement does, your employer has to prove the covenant meets the statute's criteria. If the agreement has a different main purpose, such as the sale of a business, the burden flips and you have to prove it doesn't. If you sold your company and stayed on as a rep, that difference could matter a great deal.
What Happens If Yours Is Too Broad
Many reps assume an overbroad non-compete is simply void. In Texas, that's the wrong assumption. Here is what the statute says happens instead:
The court must reform it. If the covenant is part of an enforceable agreement but its limits are unreasonable, the court shall rewrite those limits to what is reasonable and enforce that version.
No damages for what came before. The employer can't collect damages for a breach that happened before the reformation. Its relief is limited to an injunction.
Fees can run the other way. In a personal services agreement, if you show the employer knew when you signed that the limits were unreasonable, and it tried to enforce them further than necessary, the court may award you your costs and reasonable attorney's fees.
Reformation is the part to take seriously. Winning the argument that a five-state ban is too broad may only get you a smaller ban, with a judge drawing the new lines.
The Federal Ban Is Gone
In 2024 the Federal Trade Commission issued a rule banning most non-competes. On August 20, 2024, a federal court in Texas set it aside in Ryan, LLC v. FTC. On September 5, 2025, the FTC voted 3 to 1 to drop its appeal and accept that result. The FTC's rule page now says the rule is not in effect and can't be enforced. So don't count on that rule to get you out of a Texas agreement.
Texas did change its statute in 2025, but look at who it covers. Senate Bill 1318 added limits for physicians and other licensed health care practitioners on agreements made or renewed from September 1, 2025. It isn't aimed at oilfield sales.
What to Check Before You Give Notice
Find every signed paper. Offer letter, employment agreement, bonus or equity documents, and anything you signed after an acquisition. Covenants often sit in the equity paperwork. In Marsh, the covenant came with the stock options.
Read the three limits. Write down the length, the territory, and exactly what you can't do.
See what you received. Confidential information, training, or equity may be what ties the covenant to an enforceable agreement.
Check for a non-solicit. Even if the non-compete is narrow, a separate clause may reach your customers. Start with non-solicitation clauses for sales reps.
Look at the law and venue clause. It may say which state's law applies and where a dispute would be heard. Ask your lawyer what that means for you.
Time your move with counsel. Don't call customers or copy files first. Get the agreement read, then decide.
What You Can Build Either Way
A covenant can restrict what you do for a while. It doesn't erase what you know or what you've done. The rep who has spent years explaining how the work gets done, under their own name, is easier to find and easier to trust whenever the window opens back up. That's why every OilMoney client owns their profile, their posts, and their voice, even when an employer pays for the seat.
Our guide on whether your customers will follow you to a new company covers the sales side of a move, and changing distributors as a PVF rep covers the supply side. If you'd like to see what a buyer finds when they look you up today, get your Bison Walk-Around.
Sources and As-Of Dates
Texas Business and Commerce Code, Chapter 15, Sections 15.50, 15.501, 15.51, and 15.52, read November 5, 2026.
Marsh USA Inc. v. Cook, Supreme Court of Texas, No. 09-0558, opinion delivered June 24, 2011.
Federal Trade Commission, Files to Accede to Vacatur of Non-Compete Clause Rule, September 5, 2025.
Federal Trade Commission, Noncompete Rule page, checked November 5, 2026.
Epstein Becker Green, Texas Amends Restrictive Covenant Laws for Healthcare Providers, on Senate Bill 1318, read November 5, 2026.
The Warm Walk-In™ is an original method created by Amanda Leon and owned by The Valours Creative Innovation LLC.
