S.B. No. 1318 amends the Business & Commerce Code to impose new restrictions on covenants not to compete for physicians and certain health care practitioners in Texas. The bill specifies that such covenants are enforceable only if they meet certain criteria, including not denying the physician access to their patients' lists and medical records, providing a buyout option not exceeding the physician's total annual salary at the time of termination, and allowing for continued care of specific patients during acute illnesses. Additionally, the covenants must expire no later than one year after termination and limit the geographical area to a five-mile radius from where the physician primarily practiced.

The bill also introduces a new section that extends similar protections to other health care practitioners, such as dentists and nurse practitioners, ensuring that covenants not to compete are not enforceable unless they include specific provisions regarding buyouts, expiration, geographical limitations, and clear written terms. Furthermore, the bill clarifies that a covenant is void if a physician is involuntarily discharged without good cause. The changes will apply only to covenants entered into or renewed after the effective date of the Act, which is set for September 1, 2025.

Statutes affected:
Introduced: Commerce Code 15.50, Commerce Code 15.52 (Commerce Code 15)
Senate Committee Report: Commerce Code 15.50, Commerce Code 15.52 (Commerce Code 15)
Engrossed: Commerce Code 15.50, Commerce Code 15.52 (Commerce Code 15)
House Committee Report: Commerce Code 15.50, Commerce Code 15.52 (Commerce Code 15)
Enrolled: Commerce Code 15.50, Commerce Code 15.52 (Commerce Code 15)