Bill > HB4067

This bill prohibits most non-compete agreements in Texas, effectively making it illegal for businesses to restrict most workers from seeking employment elsewhere or starting their own businesses after leaving a job. The bill defines a covenant not to compete as any employment condition that prevents a worker from accepting work or operating a business after their current employment ends. For regular workers (non-senior executives), businesses are completely prohibited from creating, enforcing, or even representing that such agreements exist. For senior executives (defined as those in policy-making positions earning at least $151,164 annually), non-compete agreements entered into after September 1, 2025, are also prohibited. The bill requires businesses to provide clear notice to workers by January 1, 2026, if they have previously entered into now-void non-compete agreements. Importantly, the bill does not apply to non-compete agreements made during the sale of a business or business assets. The law will take effect on September 1, 2025, and will only apply to non-compete agreements entered into or renewed after that date. This legislation represents a significant shift in protecting workers' mobility and ability to seek employment opportunities, particularly for lower and mid-level employees.

Labor and Employment

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4067