What Are The Special Requirements For Physician Non-Compete Agreements?

The general requirement for physician non-compete agreements is that they are reasonable with respect to the time, scope, and the activity that’s being restricted. There is also a requirement that there be valid consideration, which is typically in the form of confidential information, goodwill, or specialized training.

In addition, a physician must not be denied access to a list of patients whom they’ve seen or treated within one year of the termination of employment, and a physician must be provided access to medical records upon authorization of the patient. The cost for those medical records must be set at a reasonable fee, which is determined by another statute. There must be a buyout provision, which can actually name a very reasonable price. Alternatively, the parties can agree that an arbitrator will determine what a reasonable price is for the buyout. Another requirement is that the non-compete agreement provide that the physician will not be prohibited from providing continuing care to a specific patient or patients if they have an acute illness—even after the employment has ended.

What Makes A Physician Non-Compete Agreement Enforceable?

A non-compete agreement is made enforceable by meeting all of the above requirements and complying with the statute. A fairly recent case that came out of one of the court of appeals established that a non-compete agreement which fails to mention a buyout provision is unenforceable. This means that if a buyout provision is not mentioned in a physician non-compete agreement then the employer could potentially waive the entire agreement. It is therefore crucial that each item is discussed appropriately in a physician non-compete agreement.

Why Are Doctor Or Physician Non-Compete Agreements So Commonly Put Into Place?

Physician non-compete agreements are common due to the large amount of financial investment that physician groups put in to hiring new doctors and bringing them into new practices; these groups want to protect their investments by establishing non-compete agreements.

Are Physician Non-Compete Agreements Highly Complex?

Physician non-compete agreements are highly complex due to the many requirements they carry in addition to the main requirements of any other type of non-compete agreement. In some respects, physician non-compete agreements are twice as complicated as regular non-compete agreements.

What If My Patients Insist On Following Me To A New Practice?

Situations which the appellate courts in Texas have not yet addressed involve those wherein patients insist on following their doctors to new practices; this is something I anticipate the courts will eventually have to address.

Are Physician Non-Compete Agreements Always Enforceable In Texas?

If one or more requirements of a physician non-compete agreement is unmet, then it may not be enforceable. Most physician non-compete agreements fail either because they are not reasonable or because the appropriate consideration was never provided.

For more information on Physician’s Non-Compete Agreement In Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (281) 277-3066 today.