Physician’s Non-Competes in Texas: Beware! Part 1

In Texas, physicians have unique statutory rights that must be met before a non-competition agreement can be enforced against them. See Section 15.50(a) of the Texas Business Code. At first blush, these statutory requirements appear to give physicians protections against an overbearing employer who would take a physician out of the market (and render him or her inaccessible to treat patients). But not many physicians realize the hard, cold realities of what effect these statutory requirements have in the practice of medicine today:

lA non-compete can be enforceable, depending on the language in the agreement, whether the physician chooses to resign and open up shop across the street (with the clear intent to compete) or whether the physician has worked for years building goodwill for his or her practice, but then the practices terminates that physician, with or without cause. It may have previously been common law that a non-compete cannot be enforced against a physician who is fired, but this is not the case now that Texas physicians have a specific statutory framework for enforceable non-competes.