Texas 2025 - 89th Regular

Texas House Bill HB4504 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R6224 SRA-F
2	2	By: Bonnen H.B. No. 4504
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to restrictions on covenants not to compete for physicians
10	10	and certain health care practitioners.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Sections 15.50(a) and (b), Business & Commerce
13	13	Code, are amended to read as follows:
14	14	(a) Notwithstanding Section 15.05 [of this code,] and
15	15	subject to any applicable provision of Subsection (b) and Section
16	16	15.501, a covenant not to compete is enforceable if it is ancillary
17	17	to or part of an otherwise enforceable agreement at the time the
18	18	agreement is made to the extent that it contains limitations as to
19	19	time, geographical area, and scope of activity to be restrained
20	20	that are reasonable and do not impose a greater restraint than is
21	21	necessary to protect the goodwill or other business interest of the
22	22	promisee.
23	23	(b) A covenant not to compete relating to the practice of
24	24	medicine is enforceable against a person licensed as a physician by
25	25	the Texas Medical Board if such covenant complies with the
26	26	following requirements:
27	27	(1) the covenant must:
28	28	(A) not deny the physician access to a list of the
29	29	physician's [his] patients whom the physician [he] had seen or
30	30	treated within one year of termination of the contract or
31	31	employment;
32	32	(B) provide access to medical records of the
33	33	physician's patients upon authorization of the patient and any
34	34	copies of medical records for a reasonable fee as established by the
35	35	Texas Medical Board under Section 159.008, Occupations Code; and
36	36	(C) provide that any access to a list of patients
37	37	or to patients' medical records after termination of the contract
38	38	or employment shall not require such list or records to be provided
39	39	in a format different than that by which such records are maintained
40	40	except by mutual consent of the parties to the contract;
41	41	(2) the covenant must provide for a buyout [buy out] of
42	42	the covenant by the physician in an amount that is not greater than
43	43	the physician's total annual salary and wages at the time of
44	44	termination of the contract or employment [at a reasonable price
45	45	or, at the option of either party, as determined by a mutually
46	46	agreed upon arbitrator or, in the case of an inability to agree, an
47	47	arbitrator of the court whose decision shall be binding on the
48	48	parties]; [and]
49	49	(3) the covenant must provide that the physician will
50	50	not be prohibited from providing continuing care and treatment to a
51	51	specific patient or patients during the course of an acute illness
52	52	even after the contract or employment has been terminated; and
53	53	(4) the covenant must:
54	54	(A) expire not later than the one-year
55	55	anniversary of the date the contract or employment has been
56	56	terminated; and
57	57	(B) limit the geographical area subject to the
58	58	covenant to no more than a five-mile radius.
59	59	SECTION 2. Subchapter E, Chapter 15, Business & Commerce
60	60	Code, is amended by adding Section 15.501 to read as follows:
61	61	Sec. 15.501. COVENANTS NOT TO COMPETE AGAINST HEALTH CARE
62	62	PRACTITIONERS. (a) In this section, "health care practitioner"
63	63	means:
64	64	(1) a person licensed by the State Board of Dental
65	65	Examiners to practice dentistry in this state;
66	66	(2) a person licensed under Chapter 301, Occupations
67	67	Code, to engage in professional or vocational nursing; or
68	68	(3) a physician assistant licensed under Chapter 204,
69	69	Occupations Code.
70	70	(b) A covenant not to compete against a health care
71	71	practitioner is not enforceable unless the covenant:
72	72	(1) provides for a buyout of the covenant by the health
73	73	care practitioner in an amount that is not greater than the
74	74	practitioner's total annual salary and wages at the time of
75	75	termination of the practitioner's contract or employment;
76	76	(2) expires not later than the one-year anniversary of
77	77	the date the contract or employment has been terminated; and
78	78	(3) limits the geographical area subject to the
79	79	covenant to no more than a five-mile radius.
80	80	SECTION 3. Section 15.52, Business & Commerce Code, is
81	81	amended to read as follows:
82	82	Sec. 15.52. PREEMPTION OF OTHER LAW. The criteria for
83	83	enforceability of a covenant not to compete provided by Sections
84	84	[Section] 15.50 and 15.501 [of this code] and the procedures and
85	85	remedies in an action to enforce a covenant not to compete provided
86	86	by Section 15.51 [of this code] are exclusive and preempt [any]
87	87	other law, including [criteria for enforceability of a covenant not
88	88	to compete or procedures and remedies in an action to enforce a
89	89	covenant not to compete under] common law [or otherwise].
90	90	SECTION 4. The changes in law made by this Act apply only to
91	91	a covenant not to compete entered into or renewed on or after the
92	92	effective date of this Act. A covenant not to compete entered into
93	93	or renewed before the effective date of this Act is governed by the
94	94	law in effect on the date the covenant was entered into or renewed,
95	95	and the former law is continued in effect for that purpose.
96	96	SECTION 5. This Act takes effect September 1, 2025.