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. 1-57 * * * * *