Bill Text: TX HB3139 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the enforceability of covenants not to compete against physicians.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-14 - Referred to Public Health [HB3139 Detail]

Download: Texas-2023-HB3139-Introduced.html

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88R8417 SRA-F
By: Jetton H.B. No. 3139

A BILL TO BE ENTITLED
AN ACT
relating to the enforceability of covenants not to compete against
physicians.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 15.50, Business & Commerce Code, is
amended to read as follows:
Sec. 15.50. CRITERIA FOR ENFORCEABILITY OF COVENANTS NOT TO
COMPETE. (a) Notwithstanding Section 15.05 of this code, and
subject to any applicable provision of this section [Subsection
(b)], a covenant not to compete is enforceable if it is ancillary to
or part of an otherwise enforceable agreement at the time the
agreement is made to the extent that it contains limitations as to
time, geographical area, and scope of activity to be restrained
that are reasonable and do not impose a greater restraint than is
necessary to protect the goodwill or other business interest of the
promisee.
(b) Except as provided by Subsection (b-1), a [A] covenant
not to compete relating to the practice of medicine is enforceable
against a person licensed as a physician by the Texas Medical Board
if such covenant complies with the following requirements:
(1) the covenant must:
(A) not deny the physician access to a list of his
patients whom he had seen or treated within one year of termination
of the contract or employment;
(B) provide access to medical records of the
physician's patients upon authorization of the patient and any
copies of medical records for a reasonable fee as established by the
Texas Medical Board under Section 159.008, Occupations Code; and
(C) provide that any access to a list of patients
or to patients' medical records after termination of the contract
or employment shall not require such list or records to be provided
in a format different than that by which such records are maintained
except by mutual consent of the parties to the contract;
(2) the covenant must provide for a buy out of the
covenant by the physician at a reasonable price or, at the option of
either party, as determined by a mutually agreed upon arbitrator
or, in the case of an inability to agree, an arbitrator of the court
whose decision shall be binding on the parties; and
(3) the covenant must provide that the physician will
not be prohibited from providing continuing care and treatment to a
specific patient or patients during the course of an acute illness
even after the contract or employment has been terminated.
(b-1) A covenant not to compete relating to the practice of
medicine that restricts a person licensed as a physician by the
Texas Medical Board from practicing medicine in any geographic area
for any period of time after the termination of a contract, a
partnership, employment, or another professional relationship is
void and unenforceable. This subsection does not apply to a
covenant not to compete that:
(1) places a restriction on research conducted by the
physician under the terms of a contract or in furtherance of a
partnership, employment, or another professional relationship
unless the restriction impairs the continuing care and treatment of
a patient receiving care or treatment as a part of the research;
(2) restricts a physician, other than a primary care
physician or pediatrician, who has an adjusted gross income for
federal income tax purposes of at least $250,000 for the current or
preceding tax year, and that income is attributable to compensation
earned as a physician; or
(3) is ancillary to the sale, transfer, or other
disposition of any portion of a physician's ownership interest in a
medical practice or a medical practice management company.
(c) This section [Subsection (b)] does not apply to a
physician's business ownership interest in a licensed hospital or
licensed ambulatory surgical center.
SECTION 2. This Act applies only to an agreement entered
into on or after the effective date of this Act. An agreement
entered into before the effective date of this Act is governed by
the law in effect at the time the agreement was entered into, and
that law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2023.