1-1     By:  Van de Putte (Senate Sponsor - Armbrister)       H.B. No. 3285
 1-2           (In the Senate - Received from the House May 5, 1999;
 1-3     May 6, 1999, read first time and referred to Committee on Health
 1-4     Services; May 14, 1999, reported favorably by the following vote:
 1-5     Yeas 5, Nays 0; May 14, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to covenants not to compete by physicians.
 1-9           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10           SECTION 1.  Section 15.50, Business & Commerce Code, is
1-11     amended to read as follows:
1-12           Sec. 15.50.  Criteria for Enforceability of Covenants not to
1-13     Compete.  (a)  Notwithstanding Section 15.05 of this code, and
1-14     subject to any applicable provision of Subsection (b), a covenant
1-15     not to compete is enforceable if it is ancillary to or part of an
1-16     otherwise enforceable agreement at the time the agreement is made
1-17     to the extent that it contains limitations as to time, geographical
1-18     area, and scope of activity to be restrained that are reasonable
1-19     and do not impose a greater restraint than is necessary to protect
1-20     the goodwill or other business interest of the promisee.
1-21           (b)  A covenant not to compete is enforceable against a
1-22     person licensed as a physician by the Texas State Board of Medical
1-23     Examiners if such covenant complies with the following
1-24     requirements:
1-25                 (1)  the covenant must:
1-26                       (A)  not deny the physician access to a list of
1-27     his patients whom he had seen or treated within one year of
1-28     termination of the contract or employment;
1-29                       (B)  provide access to medical records of the
1-30     physician's patients upon authorization of the patient and any
1-31     copies of medical records for a reasonable fee as established by
1-32     the Texas State Board of Medical Examiners under Section 5.08(o),
1-33     Medical Practice Act (Article 4495b, Vernon's Texas Civil
1-34     Statutes); and
1-35                       (C)  provide that any access to a list of
1-36     patients or to patients' medical records after termination of the
1-37     contract or employment shall not require such list or records to be
1-38     provided in a format different than that by which such records are
1-39     maintained except by mutual consent of the parties to the contract;
1-40                 (2)  the covenant must provide for a buy out of the
1-41     covenant by the physician at a reasonable price or, at the option
1-42     of either party, as determined by a mutually agreed upon arbitrator
1-43     or, in the case of an inabilility to agree, an arbitrator of the
1-44     court whose decision shall be binding on the parties; and
1-45                 (3)  the covenant must provide that the physician will
1-46     not be prohibited from providing continuing care and treatment to a
1-47     specific patient or patients during the course of an acute illness
1-48     even after the contract or employment has been terminated.
1-49           SECTION 2.  This Act applies to a covenant entered into on or
1-50     after the effective date of this Act.
1-51           SECTION 3.  This Act takes effect September 1, 1999.
1-52           SECTION 4.  The importance of this legislation and the
1-53     crowded condition of the calendars in both houses create an
1-54     emergency and an imperative public necessity that the
1-55     constitutional rule requiring bills to be read on three several
1-56     days in each house be suspended, and this rule is hereby suspended.
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