76R13537 E                           
         By Van de Putte                                       H.B. No. 3285
         Substitute the following for H.B. No. 3285:
         By Uresti                                         C.S.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 (Vernon's Texas Civil Statutes); and
 2-4                       (C)  provide that any access to a list of
 2-5     patients or to patients' medical records after termination of the
 2-6     contract or employment shall not require such list or records to be
 2-7     provided in a format different than that by which such records are
 2-8     maintained except by mutual consent of the parties to the contract;
 2-9                 (2)  the covenant must provide for a buy out of the
2-10     covenant by the physician at a reasonable price or, at the option
2-11     of either party, as determined by a mutually agreed upon arbitrator
2-12     or, in the case of an inabilility to agree, an arbitrator of the
2-13     court whose decision shall be binding on the parties; and
2-14                 (3)  the covenant must provide that the physician will
2-15     not be prohibited from providing continuing care and treatment to a
2-16     specific patient or patients during the course of an acute illness
2-17     even after the contract or employment has been terminated.
2-18           SECTION 2.  This Act applies to a covenant entered into on or
2-19     after the effective date of this Act.
2-20           SECTION 3.  This Act takes effect September 1, 1999.
2-21           SECTION 4.  The importance of this legislation and the
2-22     crowded condition of the calendars in both houses create an
2-23     emergency and an imperative public necessity that the
2-24     constitutional rule requiring bills to be read on three several
2-25     days in each house be suspended, and this rule is hereby suspended.