Employees who receive a cease-and-desist letter or lawsuit from a former employer over a non-compete agreement often assume that because they signed the agreement, they cannot fight it. That is not how Texas non-compete law works. Texas generally permits reasonable restrictive covenants, but employers do not have unlimited power to prevent former employees from competing. A covenant must satisfy the requirements of the Texas Covenants Not to Compete Act, including reasonable limitations on time, geographic area, and the scope of restricted activity.
A March 2026 decision from the United States District Court for the Northern District of Texas illustrates some of the most important defenses available to Texas employees. In Revive RX, LLC v. Hoelscher, No. 3:25-CV-798-K, 2026 WL 682671 (N.D. Tex. Mar. 10, 2026), Judge Ed Kinkeade concluded that both an employee’s non-compete and non-solicitation restrictions were unreasonable as written.
For employees sued over restrictive covenants, the decision is a reminder that the question is rarely simply whether a non-compete was signed. A Texas non-compete attorney defending an employee should examine the language of the covenant, the employee’s actual job duties and territory, the employer’s claimed legitimate business interest, whether the employee actually violated any enforceable restriction, and whether defenses such as waiver, ratification, consent, or reformation apply. Dolghih Law Group represents employees and employers in Texas non-compete, non-solicitation, trade-secret, temporary restraining order, and temporary injunction disputes.
The Facts of Revive RX v. Hoelscher
Revive RX is a compounding pharmacy that provides customized medications and focuses in part on weight-loss medications such as semaglutide and tirzepatide. According to the lawsuit, an important component of its business model was a sales team that marketed its services to specialized medical practices whose physicians prescribed compounded medications.
Reed Hoelscher worked for Revive RX as its Director of Commercial Strategy and Business Development, also described as its Sales Director. Revive RX alleged that his responsibilities included increasing prescription volume, developing strategic partnerships, and maintaining relationships with clinics, physicians, providers, and other business partners. The company also alleged that he had access to confidential information concerning vendors, physicians, clinics, business relationships, and pharmaceutical ingredient costs.
Hoelscher had signed an employment agreement containing non-compete and non-solicitation restrictions. Revive RX alleged that while still employed, he secretly created or operated an interconnected group of competing businesses that diverted prescriptions and revenue away from Revive RX. It further alleged that he worked with telehealth or wellness businesses that directed patients to providers whose prescriptions were filled by competing pharmacies and that he conspired with his father, Revive RX’s former CEO, to divert business.
Hoelscher moved to dismiss the lawsuit under Federal Rule of Civil Procedure 12(b)(6), meaning the court was determining whether Revive RX had alleged legally plausible claims, not whether the employer had actually proved them.
The “In Any Capacity” Non-Compete Was Too Broad
The most important portion of the decision for Texas employees concerns the language of Hoelscher’s non-compete.
The agreement prohibited him for one year after termination from working or providing services “in any capacity” within the restricted area to a competitor of Revive RX concerning all or any portion of Revive RX’s business.
The agreement therefore contained both a time limitation and a geographic limitation. The problem was its scope of prohibited activity. It did not meaningfully restrict the covenant to the type of work Hoelscher actually performed for Revive RX.
Judge Kinkeade relied on Fifth Circuit authority explaining that Texas courts have found non-competes unreasonable when they effectively impose an industry-wide exclusion. Because the covenant prohibited Hoelscher from working for a competitor “in any capacity,” the court concluded that it was overbroad and unreasonable as written.
That distinction is important. An employer may have a legitimate interest in preventing a former sales employee from immediately exploiting customer relationships developed on the employer’s behalf. But that does not necessarily justify preventing the employee from performing every conceivable job for every competitor.
For example, a salesperson who handled North Texas customers might reasonably be restricted from selling competing products to customers with whom the employee developed relationships. A covenant prohibiting that same employee from working for a competitor in accounting, operations, logistics, or another unrelated role is considerably harder to justify.
North Texas Legal News has previously discussed this problem in What Is a “Reasonable” Non-Competition Agreement? and TOP 5 Reasons a Non-Compete May Be Unenforceable. The Revive RX decision provides a recent Northern District of Texas example of a federal court applying that principle.
The Customer Non-Solicitation Restriction Was Also Unreasonable
Hoelscher also challenged his non-solicitation restriction. The agreement prohibited solicitation of “any” client, customer, prospective customer, vendor, contractor, supplier, or other business partner of Revive RX.
Judge Kinkeade found that restriction unreasonable as written as well. It was not limited to customers Hoelscher had personally serviced or contacted. Nor was it restricted to customers about whom he acquired confidential information. Instead, it broadly covered actual and prospective customers and multiple categories of other business relationships.
This provides another important defense for employees. Non-solicitation agreements should be analyzed independently from traditional non-competes. An employer may have a legitimate interest in protecting customer goodwill, but a clause prohibiting contact with every customer and prospect throughout an organization may extend far beyond the goodwill attributable to the particular employee.
An employee defending a Texas non-solicitation claim should therefore ask which customers the employee actually serviced, which relationships were developed through the employer, whether the employee possessed confidential information concerning those customers, and whether the restriction reaches people or entities the employee never knew.
Why the Employer’s Claims Were Not Dismissed
The most interesting part of Revive RX is that Hoelscher persuaded the court that both restrictions were unreasonable, yet still lost his motion to dismiss those claims.
The reason is Texas’s statutory reformation rule.
Under Texas Business and Commerce Code § 15.51(c), when a covenant is otherwise enforceable but contains unreasonable restrictions as to time, geographic area, or scope of activity, a court may be required to reform the covenant so that it imposes reasonable limitations.
Judge Kinkeade concluded that dismissal was premature because the briefing did not establish what reformation should occur or whether Revive RX could ultimately recover under a properly reformed restriction. The court therefore denied dismissal of the breach-of-contract claims even after finding the non-compete and non-solicitation provisions unreasonable as written.
That result is critically important for Texas employees. An overbroad non-compete does not necessarily disappear. A court may narrow it.
But reformation can still significantly benefit the employee. Texas law limits an employer’s ability to recover damages for conduct occurring before reformation when the covenant required judicial narrowing. And once a covenant is reformed, the employee may be able to demonstrate that his or her actual conduct falls outside the narrower restriction.
For example, an employer may demand enforcement of a nationwide prohibition against working for any competitor. A court might instead narrow the covenant to particular customers, activities, or territory. If the employee’s new job does not involve those customers or activities, the employer’s practical case may become significantly weaker.
North Texas Legal News discussed a similar geographical-overbreadth problem in Texas Court Rejects Wound Care Company’s Overbroad Non-Compete, where a federal court narrowed a covenant that extended far beyond the employee’s actual Texas working territory.
Ratification and Other Employer-Conduct Defenses
Hoelscher also argued that Revive RX had ratified his alleged conduct because its CEO—who was Hoelscher’s father—knew of and approved the activities the company later challenged.
The court did not hold that ratification was legally unavailable. Instead, it concluded that ratification was an affirmative defense requiring proof and that the necessary facts were not conclusively established from Revive RX’s own complaint. The defense therefore could not justify dismissal at the Rule 12(b)(6) stage.
That distinction matters in real-world non-compete litigation. An employer may know for months that an employee is engaging in particular conduct, approve outside business activities, encourage dealings with certain customers, or represent that a restriction will not be enforced. Emails, text messages, testimony, and company practices may later support waiver, consent, ratification, acquiescence, or estoppel defenses.
The fact that those defenses require discovery does not make them weak. It simply means they may not be capable of resolving the lawsuit immediately.
Defeating the Non-Compete Does Not Necessarily Defeat Trade-Secret Claims
Another lesson from Revive RX is that non-compete lawsuits frequently involve much more than the restrictive covenant itself.
Revive RX also asserted claims involving the federal Defend Trade Secrets Act, the Texas Uniform Trade Secrets Act, fiduciary duties, and other theories. The court concluded that the employer had alleged enough facts for those claims to continue beyond the pleading stage.
Employees therefore should not assume that proving a non-compete is overbroad eliminates all risk. Employers often allege that departing employees downloaded documents, forwarded emails, retained customer lists, misused pricing information, or disclosed proprietary information to a new employer.
Those claims require a separate analysis. The employer still must establish that the information qualifies for legal protection and that the employee wrongfully acquired, disclosed, or used it. But an employee with an excellent non-compete defense can unnecessarily complicate the case by taking confidential documents when leaving.
North Texas Legal News has previously discussed steps employees can take to reduce litigation risk in How to Avoid a Non-Compete Lawsuit and How to Get Out of a Non-Compete Agreement.
What Revive RX Means for Texas Employees
The central lesson from Revive RX v. Hoelscher is that an employee should never assume a non-compete is enforceable simply because it appears in a signed agreement.
An “in any capacity” restriction may prohibit far more activity than Texas law permits. A non-solicitation provision covering every customer, prospective customer, vendor, contractor, supplier, and business partner may likewise be overbroad. Geographic restrictions may extend far beyond the employee’s actual territory. Employer knowledge or approval may create additional defenses. And even where a court reforms an agreement rather than invalidating it entirely, reformation can materially affect the employer’s remedies and the employee’s ability to continue working.
At the same time, Revive RX shows why employees should not rely on overbreadth alone. Judge Kinkeade found both restrictive covenants unreasonable as written but nevertheless denied the employee’s motion to dismiss because reformation and other factual issues remained unresolved.
Texas employees who receive a non-compete demand letter, are threatened with a temporary restraining order, or are sued by a former employer should have the agreement and surrounding facts analyzed promptly. Dolghih Law Group represents employees and employers throughout Texas in non-compete, non-solicitation, trade-secret, temporary restraining order, and temporary injunction disputes.
The question in a Texas non-compete case is rarely simply whether the employee signed an agreement. The more important questions are what the employer is legitimately entitled to protect, whether the agreement restricts more than Texas law allows, what a reasonable covenant would actually prohibit, and whether the employee’s conduct violates that narrower restriction. Revive RX v. Hoelscher is a recent reminder from a Dallas federal court that those distinctions can make a substantial difference in defending a Texas non-compete lawsuit.
Leiza Dolghih is the founder of Dolghih Law Group PLLC. She is board certified in labor and employment law and has 20+ years of experience in commercial and employment litigation, including trade secrets and non-compete disputes. You can contact her directly at leiza@dlg-legal.com or (214) 531-2403.