Texas House Bill HB4504

Texas 2025 - 89th Regular

• Filed: 3/12/25
• Out of House Committee: 5/5/25
• Voted on by House: 5/14/25

Caption

Relating to restrictions on covenants not to compete for physicians and certain health care practitioners.

Impact

If enacted, HB 4504 would significantly impact the enforceability of non-compete agreements for healthcare practitioners, potentially increasing job mobility among physicians and practitioners in Texas. This change aims to protect physicians from overly restrictive agreements that impede their ability to practice medicine, thereby addressing concerns about patient access to care and continuity. By limiting the terms of these covenants, the bill hopes to establish a fairer framework for employment within the healthcare sector, ensuring that the hard-earned expertise of practitioners is not restricted unduly by their former employers.

Summary

House Bill 4504 seeks to amend regulations surrounding covenants not to compete specifically for physicians and certain health care practitioners in Texas. The bill establishes that such covenants are unenforceable under specific conditions, expanding the rights of healthcare employees regarding their professional mobility after employment ends. One of the primary provisions of the bill is that physicians cannot be restricted from accessing their patients' lists or medical records after leaving a practice, thereby facilitating ongoing care for patients. Additionally, any non-compete agreement must include a buyout clause not exceeding the physician's annual salary, and restrictions on geographical areas are limited to a five-mile radius from the former practice location.

Sentiment

Discussions around HB 4504 have been largely supportive, highlighting a consensus among various health advocacy groups that the bill promotes patient-centered care and benefits healthcare practitioners. However, concerns have been raised about the potential negative effects on medical practices that may rely on the protections afforded by non-compete agreements to maintain their client pools and business stability. Proponents of the bill argue that the existing system disproportionately favors employers and that reform is essential for a more competitive and flexible healthcare market.

Contention

Key points of contention surrounding HB 4504 include the balance between protecting the legitimate business interests of healthcare employers and ensuring that healthcare employees can swiftly adapt to changing employment landscapes without constraints. Opponents may argue that dismantling non-compete agreements could lead to increased competition for patients and destabilize practices, especially smaller healthcare entities. This potential for disruption underscores the complex dynamics at play in the healthcare industry in Texas, as legislators seek to safeguard both patient access and the operational integrity of medical practices.

Texas Constitutional Statutes Affected

Occupations Code

• Chapter 301. Nurses
  • Section: New Section
  • Section: New Section

• Chapter 204. Physician Assistants
  • Section: New Section
  • Section: New Section