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.