Physician Non-Compete Agreement Requirements in Texas

People don’t often think of hospitals or medical practices as businesses, but they are just as much of a business as a restaurant or corporation. Part of a legitimate business is the people who work for it and its customers. In the case of a medical practice, the equivalent could be physicians and patients.

Employers often utilize non-compete agreements to protect trade secrets and valuable client lists and prevent employees from entering into a position in direct competition from them. When health care providers seek to hire a new doctor, a physician non-compete agreement can also be drafted. However, these clauses often come with special requirements and are more regulated than the typical non-compete.

Our Houston health care attorneys at Hendershot Cowart P.C. are going over the requirements of a Texas physician non-compete agreement.

Texas Requirements for Physician Non-Competes

Texas is one of the few states that allow physician non-compete agreements. To be enforceable, there are special regulatory requirements in place that must be met. These have been designed to protect a patient’s right to receive care by the doctor of their choice, no matter who employs the doctor.

A non-compete involving physicians is only enforceable if the following criteria are established:

  • It must not deny a physician access to a list of their patients they have treated within one year of separation.

  • It must provide a physician access to medical records for a patient they have treated in the year prior to separating from the practice.

  • It must allow for the patient lists and records above to be accessible to the physician in the format in which they are kept in the ordinary course of business of the medical practice.

  • It must permit the physician to continue treating any of her patients with acute illnesses even after her contract or employment has terminated.

  • It must contain a provision allowing the physician to buy out of the agreement.

Texas has created these special requirements for medical professionals and their patients because the stakes are often higher, which means extra protections must be implemented.

Additionally, there are general requirements that must be met for the agreement to be enforceable. The first includes being part of an otherwise enforceable agreement and ensuring reasonableness and specific limitations in the scope, geographic area, and duration.

Our Experienced Health care Business Attorneys Can Help

Drafting physician non-competes can be a complex process that involves both state and federal laws and special considerations. As such, doctors and medical practices entering this type of agreement should consult with a skilled health care business attorney to ensure that the enforceable contract protects all parties involved.

If you have questions about your non-compete agreement, call (713) 909-7323 to talk to our experienced legal team today.

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