2023S0236-1 03/02/23
 
  By: Schwertner S.B. No. 1534
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to restrictions on covenants not to compete for physicians
  and certain other health care practitioners.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 15.50(b), Business & Commerce Code, is
  amended to read as follows:
         (b)  A covenant not to compete relating to the practice of
  medicine is enforceable against a person licensed as a physician by
  the Texas Medical Board if such covenant complies with the
  following requirements:
               (1)  the covenant must:
                     (A)  not deny the physician access to a list of the
  [his] patients whom the physician [he] had seen or treated within
  one year of termination of the contract or employment;
                     (B)  provide access to medical records of the
  physician's patients upon authorization of the patient and any
  copies of medical records for a reasonable fee as established by the
  Texas Medical Board under Section 159.008, Occupations Code; and
                     (C)  provide that any access to a list of patients
  or to patients' medical records after termination of the contract
  or employment shall not require such list or records to be provided
  in a format different than that by which such records are maintained
  except by mutual consent of the parties to the contract;
               (2)  the covenant must provide for a buyout [buy out] of
  the covenant by the physician in an amount not greater than the
  physician's total annual salary and wages at the time of
  termination of the contract or employment; [at a reasonable price
  or, at the option of either party, as determined by a mutually
  agreed upon arbitrator or, in the case of an inability to agree, an
  arbitrator of the court whose decision shall be binding on the
  parties; and]
               (3)  the covenant must provide that the physician will
  not be prohibited from providing continuing care and treatment to a
  specific patient or patients during the course of an acute illness
  even after the contract or employment has been terminated; and
               (4)  the covenant must provide that:
                     (A)  it expires within one year of termination of
  the contract or employment; and
                     (B)  the radius of the geographical area subject
  to the covenant is not greater than five miles.
         SECTION 2.  Subchapter E, Chapter 15, Business & Commerce
  Code, is amended by adding Section 15.501 to read as follows:
         Sec. 15.501.  COVENANT NOT TO COMPETE FOR HEALTH CARE
  PRACTITIONERS. (a) In this section, "health care practitioner"
  means a person licensed in this state as a dentist, nurse, or
  physician assistant.
         (b)  An employer may not require a health care practitioner
  to enter into a covenant not to compete unless the covenant:
               (1)  provides for a buyout of the covenant by the health
  care practitioner in an amount not greater than the practitioner's
  total annual salary and wages at the time of termination of the
  practitioner's contract or employment; 
               (2)  provides that it expires within one year of the
  date of termination of the contract or employment; and
               (3)  provides that the radius of the geographical area
  subject to the covenant is not greater than five miles.
         (c)  A covenant not to compete entered into by a health care
  practitioner that fails to comply with Subsection (b) is void and
  unenforceable.
         SECTION 3.  Section 15.52, Business & Commerce Code, is
  amended to read as follows:
         Sec. 15.52.  PREEMPTION OF OTHER LAW. The criteria for
  enforceability of a covenant not to compete provided by Sections 
  [Section] 15.50 and 15.501 [of this code] and the procedures and
  remedies in an action to enforce a covenant not to compete provided
  by Section 15.51 [of this code] are exclusive and preempt [any]
  other law, including [criteria for enforceability of a covenant not
  to compete or procedures and remedies in an action to enforce a
  covenant not to compete under] common law [or otherwise].
         SECTION 4.  The changes in law made by this Act apply only to
  a covenant not to compete entered into or renewed on or after the
  effective date of this Act. A covenant not to compete entered into
  or renewed before the effective date of this Act is governed by the
  law in effect on the date the covenant was entered into or renewed,
  and the former law is continued in effect for that purpose.
         SECTION 5.  This Act takes effect September 1, 2023.