Reformation (of a Covenant Not to Compete)
Reformation is a court's rewriting of an overbroad non-compete so that it becomes enforceable. Under section 15.51(c) a Texas court that finds the time, geographic or activity limitations unreasonable shall reform them; the verb is shall, not may. The covenant is narrowed rather than struck, but the employer loses damages for any breach before reformation.
An overbroad non-compete in Texas does not simply fail. The court cuts it down and enforces what is left. That single feature separates Texas from states where an unreasonable restraint is void, and it changes how both sides should think about drafting and about litigation strategy.
The statute is mandatory
Tex. Bus. & Com. Code § 15.51(c) provides that if a covenant contains limitations as to time, geographical area, or scope of activity to be restrained that are not reasonable and impose a greater restraint than is necessary to protect the promisee's goodwill or other business interest, the court shall reform the covenant to the extent necessary and enforce it as reformed. That is not discretionary language. A trial court that responds to an overbroad covenant by refusing to enforce it at all has not applied the section.
The business court read it that way in Galderma Laboratories v. Brenner, 2026 Tex. Bus. 12 (8th Div. Mar. 12, 2026), treating reformation as mandatory rather than discretionary and narrowing a covenant that reached too far to a single product market instead of voiding it. The narrowing was substantive. An employee restrained across a whole therapeutic area was left restrained in one line of business.
The price the employer pays
Reformation is not free. The same subsection provides that the court may not award the promisee damages for a breach of the covenant occurring before reformation, so relief for that period is injunctive only. And where the primary purpose of the agreement was to obligate the promisor to render personal services, and the promisor proves the promisee knew at the time of execution that the covenant contained unreasonable limitations and sought to enforce it to a greater extent than was necessary, the court may award the promisor costs including reasonable attorney's fees.
Read those two consequences together and the incentive is obvious. An employer that papers every departing salesperson with a nationwide, five-year, all-activities covenant is not being careful. It is drafting the employee's fee application.
What reformation cannot fix
Section 15.51(c) repairs unreasonable limitations. It does not repair a covenant that fails the threshold requirements of § 15.50, which asks whether the covenant is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made. Marsh USA Inc. v. Cook, 354 S.W.3d 764 (Tex. 2011), loosened how tightly the consideration must relate to the restraint, holding that stock options granted to link an employee's interest to company goodwill could support a covenant. But a covenant with no otherwise enforceable agreement behind it is unenforceable, and no amount of judicial narrowing changes that.
Burden of proof follows the same division. Where the agreement's primary purpose is to obligate the promisor to render personal services, the party seeking enforcement carries the burden on the § 15.50 criteria. Otherwise the burden sits with the party resisting enforcement.
For drafting, write the covenant you can actually defend and include a severability and reformation clause telling the court what the parties would have agreed to. For litigation, an employee's best day is often not a win on enforceability but a reformation order plus a fee award, and that outcome should be pleaded for from the start.