Texas Requirements for Physician Non-Competes

If you’re a physician looking for a change in their career, it’s important to cover all of your bases. Knowing Texas requirements for physician non-competes is an important part of the process. This is because Texas has special laws for doctor groups and doctors entering into such non-compete agreements.

All requirements of physician non-competes are listed out in Texas Business Code 15.50. This statute defines the criteria for enforcing non-compete agreements against physicians. According to the Texas State Board of Medical Examiners, any non-compete must meet the following requirements:

  • The covenant should provide access to the physician’s patients’ medical records and any medical records’ copies through the patient’s authorization, for a reasonable fee set by the Texas State Board of Medical Examiners under Section 159.008. It shouldn’t deny the physician access to the list of patients he or she has seen or treated within a year of the contract or employment termination. The covenant should ascertain access to a patients’ list or medical records upon termination of the contract or employment need not require lists or records be provided in a different format than which the records are usually maintained unless the parties of the contract mutually consent to it.
  • The physician should not be prohibited from providing continual treatment and care to specific patients suffering from an acute illness even after termination of the contract or employment.
  • It should permit the physician to buy out the covenant at a reasonable price, or as per either party’s option and as determined by a mutual arbitrator. If no decision is made, a court arbitrator’s decision can bind both parties.

When a medical practice is sold or a doctor leaves, doctors and doctor groups in Texas face the enforcement of physician non-compete agreement .

Implementing Non-Compete and Buy-Sell Buy Out Agreements

An employer’s request for temporary injunction can face rejection by the Houston Court of Appeals because of the absence of a buyout provision in the non-compete agreement.

The absence of a buy-sell/buy out in a physician’s non-compete agreement makes the agreement unenforceable. Creating a buy out/buy-sell agreement mandated by the statute will also not help the court and arbitrator to reform the agreement.

Implementation of Non-Compete in Employment Agreement

If or when the group tries to enforce a non-compete against a former group member, it is the Texas doctors’ groups responsibility of maintaining the non-compete is ancillary to a reasonable and enforceable agreement. In such cases, the non-compete is found in the employment agreement, which meets all the terms established by Texas courts and laws on a non-compete clause.

In case the agreement is supportive to agreements other than employment such as sale of business, the party the covenant is asserted against assumes the responsibility of proving the agreement doesn’t meet the Texas Business Code statutory requirements of Section 15.50(b). Moreover, employers seeking enforcement of the doctor’s non-compete clause must bear the responsibility of proving breach of the non-compete clause. They must also prove an injunction or damages should be granted.

Contact An attorney

If you have questions about Texas Requirements for Physician Non-Competes or would like to schedule a consultation with a lawyer at Chelle Law, contact us today.