Though Section 15.50 of the Texas Business and Commerce Code historically included certain restrictions for physician noncompetes, effective September 1, 2025, such restrictions extend to dentists, nurses, and physician assistants entering into new or renewed noncompetes on or after September 1, 2025.
Senate Bill 1318 created Section 15.501 of the Texas Business and Commerce Code which extends noncompete restrictions to non-physician health care practitioners for the first time.
Who is covered under Section 15.501? Dentists, professional and vocational nurses, and physician assistants.
What non-compete restrictions now apply to these non-physician health care practitioners? A noncompete covenant for dentists, nurses, and physician assistants is not enforceable unless it:
- Is limited to a one-year maximum duration;
- Is limited to a five-mile geographical limit;
- Provides a buyout of the covenant by the health care practitioner in an amount not to exceed one-year salary at the time of termination; and
- Is clearly and conspicuously stated in writing.
What steps do employers in the health care industry need to take?
Because the hiring landscape over the last decade in Texas has become increasingly competitive and attractive to dentists, nurses, and physician assistants, employers need to:
- Immediately review the terms of existing and future employment agreements to ensure compliance with Section 15.501.
- Audit existing agreements subject to autorenewal or renegotiation after September 1, 2025.
- Audit current geographic restrictions in situations where practitioners work remotely or at multiple locations.
A link to the text of the statute may be browsed here.
This blog post was drafted by Kunal Shah, an attorney in the Plano, Texas, office of Spencer Fane. For more information, visit spencerfane.com.
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