A properly drafted covenant not to compete is a necessity for physicians and medical practices. In this post, you will learn about the specific requirements for these types of non-compete agreements in Texas.
Texas law allows physicians and medical practices to enter into covenants not to compete, but these covenants must be sufficiently limited so as not to put too high a burden, or "restraint," on the person who promises not to compete.
So long as the covenant complies with a prescribed set of requirements, as per Section 15.50(b) of the Texas Business and Commerce Code, a covenant not to compete in medical practice is "enforceable against a person licensed as a physician by the Texas Medical Board."
The Specific Requirements for Physician Non-Compete Agreements
A covenant not to compete must be limited in terms of time, its physical geographic reach, and its scope. It also must generally be executed at the same time as the employment contract as a whole.
However, for physicians and medical practices, Texas law imposes additional requirements, which include (as per Section 15.50):
- Access to the physician's list of patients evaluated or treated within one year from the end of employment
- Access to patients' medical records
- Access to patient lists and medical records in the same format as they are usually maintained, unless specified otherwise by contract
- A buy-out provision and a method for resolving related disputes
- No restraint on the physician to continue treating patients suffering from acute illnesses, even after employment has ended
In general, these are the criteria for the enforceability of these types of covenants in Texas. Based in Houston, the lawyers of Kerr, Hendershot & Cannon, P.C. review many physician employment agreements, with a specific focus on non-compete agreements.
Our Focus at Hendershot, Cannon & Hisey, P.C.
We advise physicians making a transition from one medical practice to another (or similar career change). We also advise medical practices that employ physicians. To arrange a consultation, call (713) 909-7323. To learn more about our practice, visit our page on health and medical law.