Non-compete laws · TX

Texas physician non-compete law

As of October 21, 2026, Texas law allows physician non-competes only within limits, including at most 5 miles and 12 months and a required buyout.

Allowed with physician-specific limitsChecked 2026-10-21

Physician noncompetes signed or renewed on/after Sept. 1, 2025 must include a buyout capped at annual salary and wages, last no more than one year, cover no more than five miles, and be clearly written; void if physician is involuntarily discharged without good cause. (Tex. Bus. & Com. Code ch. 15 (official statutes site))

Changed recently. The current rule took effect 2025-09-01. Pages and guides written before then may describe the old rule.

Limits in the law

Maximum distance
5 miles
Maximum duration
12 months
Buyout required
Yes
  • Buyout cap: Not greater than the physician's total annual salary and wages at the time of termination
  • Radius measured from the location where the physician primarily practiced before termination
  • Covenant must not deny access to a list of patients the physician saw or treated within one year of termination
  • Covenant must provide access to patients' medical records on patient authorization, for a reasonable fee set by the Texas Medical Board
  • Covenant must allow continuing care of a specific patient during an acute illness after termination
  • Terms and conditions must be clearly and conspicuously stated in writing
  • Void and unenforceable if the physician is involuntarily discharged without good cause (good cause = reasonable basis directly related to the physician's conduct, job performance, or contract/employment record)
  • Must still be ancillary to an otherwise enforceable agreement and reasonable in time, area and scope (Tex. Bus. & Com. Code § 15.50(a))

Who it covers

Physicians licensed by the Texas Medical Board (§ 15.50(b)). New § 15.501 separately requires a salary-capped buyout, 1-year/5-mile limits and clear written terms for dentists, licensed professional or vocational nurses, and physician assistants.

Exceptions

  • § 15.50(b) does not apply to a physician's business ownership interest in a licensed hospital or licensed ambulatory surgical center (§ 15.50(c))
  • Managing or directing medical services in an administrative capacity is not the 'practice of medicine' for § 15.50(b) (§ 15.50(b-1))
  • Covenants entered into or renewed before Sept. 1, 2025 remain governed by prior law (SB 1318 § 4)

Effective date

The current rule took effect 2025-09-01.

Notes

Covenants entered or renewed before Sept. 1, 2025 follow prior law. § 15.501 applies the buyout, one-year and five-mile limits to dentists, nurses and PAs, but not the patient-list, records, continuing-care or discharge provisions. Codified text was read from the enrolled bill.

Bills that have not become law

Non-compete bills from the 2025 and 2026 sessions that had not become law as of 2026-10-21, furthest along first. A bill that died has to be filed again to move in 2027. The 2027 session starts 2027-01-12 and ends 2027-05-31.

  • HB 4067 (2025) · All workers

    Would prohibit covenants not to compete against workers (general ban)

    Introduced · Died. Filed 2025-03-07; referred to House Trade, Workforce & Economic Development (s/c on Workforce) 2025-03-27; no hearing; died at sine die 2025-06-02

Sources

Questions to ask about your contract

  • Is the radius measured from your practice site or from every location the employer owns?
  • Does the restriction apply if the employer terminates you without cause?
  • Is there a buyout, and how is the amount calculated?
  • What does your state's law say about physician non-competes?
Check a contract against Texas lawAll states

Not legal advice. This page summarizes the law as written. Whether a particular agreement is enforceable depends on its wording, when it was signed and court decisions. Ask an attorney licensed in Texas.