By Van de Putte H.B. No. 3285 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to covenants not to compete by physicians. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Section 15.50, Business & Commerce Code, is 1-5 amended to read as follows: 1-6 Sec. 15.50. Criteria for Enforceability of Covenants not to 1-7 Compete. (a) Notwithstanding Section 15.05 of this code, and 1-8 subject to any applicable provision of Subsection (b), a covenant 1-9 not to compete is enforceable if it is ancillary to or part of an 1-10 otherwise enforceable agreement at the time the agreement is made 1-11 to the extent that it contains limitations as to time, geographical 1-12 area, and scope of activity to be restrained that are reasonable 1-13 and do not impose a greater restraint than is necessary to protect 1-14 the goodwill or other business interest of the promisee. 1-15 (b) A covenant not to compete is enforceable against a 1-16 person licensed as a physician by the Texas State Board of Medical 1-17 Examiners if such covenant complies with the following 1-18 requirements: 1-19 (1) the covenant must: 1-20 (A) not deny the physician access to a list of 1-21 his patients whom he had seen or treated within one year of 1-22 termination of the contract or employment; 1-23 (B) provide access to medical records of the 1-24 physician's patients upon authorization of the patient and any 2-1 copies of medical records for a reasonable fee as established by 2-2 the Texas State Board of Medical Examiners under Section 5.08(o), 2-3 Medical Practice Act (Article 4495b, Vernon's Texas Civil 2-4 Statutes); and 2-5 (C) provide that any access to a list of 2-6 patients or to patients' medical records after termination of the 2-7 contract or employment shall not require such list or records to be 2-8 provided in a format different than that by which such records are 2-9 maintained except by mutual consent of the parties to the contract; 2-10 (2) the covenant must provide for a buy out of the 2-11 covenant by the physician at a reasonable price or, at the option 2-12 of either party, as determined by a mutually agreed upon arbitrator 2-13 or, in the case of an inabilility to agree, an arbitrator of the 2-14 court whose decision shall be binding on the parties; and 2-15 (3) the covenant must provide that the physician will 2-16 not be prohibited from providing continuing care and treatment to a 2-17 specific patient or patients during the course of an acute illness 2-18 even after the contract or employment has been terminated. 2-19 SECTION 2. This Act applies to a covenant entered into on or 2-20 after the effective date of this Act. 2-21 SECTION 3. This Act takes effect September 1, 1999. 2-22 SECTION 4. The importance of this legislation and the 2-23 crowded condition of the calendars in both houses create an 2-24 emergency and an imperative public necessity that the 2-25 constitutional rule requiring bills to be read on three several 2-26 days in each house be suspended, and this rule is hereby suspended.