| 1 | 1 | | 88R13733 SRA-D |
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| 2 | 2 | | By: Smith H.B. No. 5149 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to covenants not to compete for certain psychology or |
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| 8 | 8 | | counseling professions. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 15.50, Business & Commerce Code, is |
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| 11 | 11 | | amended by amending Subsection (a) and adding Subsection (b-1) to |
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| 12 | 12 | | read as follows: |
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| 13 | 13 | | (a) Notwithstanding Section 15.05 of this code, and subject |
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| 14 | 14 | | to any applicable provision of Subsection (b) or (b-1), a covenant |
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| 15 | 15 | | not to compete is enforceable if it is ancillary to or part of an |
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| 16 | 16 | | otherwise enforceable agreement at the time the agreement is made |
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| 17 | 17 | | to the extent that it contains limitations as to time, geographical |
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| 18 | 18 | | area, and scope of activity to be restrained that are reasonable and |
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| 19 | 19 | | do not impose a greater restraint than is necessary to protect the |
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| 20 | 20 | | goodwill or other business interest of the promisee. |
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| 21 | 21 | | (b-1) A covenant not to compete relating to the practice of |
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| 22 | 22 | | psychology or other counseling profession is enforceable against a |
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| 23 | 23 | | person licensed under Subtitle I, Title 3, Occupations Code, if the |
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| 24 | 24 | | covenant complies with the following requirements: |
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| 25 | 25 | | (1) the covenant must: |
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| 26 | 26 | | (A) not deny the person access to a list of the |
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| 27 | 27 | | person's clients or patients who have been provided services within |
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| 28 | 28 | | one year of termination of the contract or employment; |
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| 29 | 29 | | (B) provide access to client or patient records |
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| 30 | 30 | | upon authorization of the client or patient and any copies of client |
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| 31 | 31 | | or patient records for a reasonable fee as established by the |
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| 32 | 32 | | appropriate licensing or regulatory authority; and |
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| 33 | 33 | | (C) provide that any access to a list of clients |
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| 34 | 34 | | or patients or to clients' or patients' records after termination of |
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| 35 | 35 | | the contract or employment shall not require the list or records to |
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| 36 | 36 | | be provided in a format different than that by which the records are |
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| 37 | 37 | | maintained except by mutual consent of the parties to the contract; |
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| 38 | 38 | | (2) the covenant must provide for a buyout of the |
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| 39 | 39 | | covenant by the person at a reasonable price or, at the option of |
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| 40 | 40 | | either party, as determined by a mutually agreed upon arbitrator |
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| 41 | 41 | | or, in the case of an inability to agree, an arbitrator of the court |
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| 42 | 42 | | whose decision shall be binding on the parties; and |
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| 43 | 43 | | (3) the covenant must provide that the person will not |
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| 44 | 44 | | be prohibited from providing continuing services to a specific |
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| 45 | 45 | | client or patient during the course of an acute event even after the |
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| 46 | 46 | | contract or employment has been terminated. |
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| 47 | 47 | | SECTION 2. This Act applies only to an agreement entered |
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| 48 | 48 | | into on or after the effective date of this Act. An agreement |
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| 49 | 49 | | entered into before the effective date of this Act is governed by |
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| 50 | 50 | | the law in effect at the time the agreement was entered into, and |
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| 51 | 51 | | that law is continued in effect for that purpose. |
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| 52 | 52 | | SECTION 3. This Act takes effect September 1, 2023. |
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