The bill, H.B. No. 4504, aims to amend the Business & Commerce Code regarding the enforceability of covenants not to compete for physicians and certain health care practitioners. Key changes include the stipulation that such covenants must provide for a buyout option for the physician or health care practitioner, which cannot exceed their total annual salary at the time of contract termination. Additionally, the bill mandates that these covenants must not deny access to patient lists or medical records, must allow for continued care of specific patients during acute illnesses, and must expire no later than one year after the termination of the contract. The geographical limitation for these covenants is set to a maximum of a five-mile radius.

Furthermore, the bill introduces a new section, 15.501, which specifically addresses covenants not to compete against health care practitioners, defining who qualifies as a health care practitioner and outlining similar requirements for enforceability as those for physicians. The bill also clarifies that the criteria for enforceability provided in Sections 15.50 and 15.501 are exclusive and preempt any other laws, including common law. 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)