By Van de Putte H.B. No. 3285 76R9056 T 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 and 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 5.05 of this code, and 1-8 subject to any applicable provision of Subsection (b) of this 1-9 section, a covenant not to compete is enforceable if it is 1-10 ancillary to or part of an otherwise enforceable agreement at the 1-11 time the agreement is made to the extent that it contains 1-12 limitations as to time, geographical area, and scope of activity to 1-13 be restrained that are reasonable and do not impose a greater 1-14 restraint than is necessary to protect the goodwill or other 1-15 business interest of the promisee. 1-16 (b) A covenant not to compete is enforceable against a 1-17 person licensed as a physician by the Texas State Board of Medical 1-18 Examiners if such covenant also complies with the following 1-19 requirements: 1-20 (1) the covenant must provide for unrestricted access 1-21 to and copies of medical records of patients under the care of the 1-22 physician after termination of the contract or employment; 1-23 (2) the covenant must provide for a buy out provision 1-24 by the physician at a reasonable price as determined by a mutually 2-1 agreed upon arbitrator; 2-2 (3) the covenant must provide that the covenant is 2-3 void if the contract or employment of the physician has been 2-4 terminated without cause or in bad faith; and 2-5 (4) the covenant must provide that the physician will 2-6 be able to provide continuing care and treatment to a specific 2-7 patient or patients with an acute illness even after the contract 2-8 or employment has been terminated. 2-9 SECTION 2. This Act applies to a covenant entered into 2-10 before, on, or after the effective date of this Act. 2-11 SECTION 3. This Act takes effect September 1, 1999. 2-12 SECTION 4. The importance of this legislation and the 2-13 crowded condition of the calendars in both houses create an 2-14 emergency and an imperative public necessity that the 2-15 constitutional rule requiring bills to be read on three several 2-16 days in each house be suspended, and this rule is hereby suspended.