Doctor Noncompetes: Texas Restrictions Apply to Dentists, Physicians’ Assistants, and Nurses 

On June 20, 2025, Texas Governor Greg Abbott signed into legislation Senate Invoice 1318 (SB 1318), which can additional prohibit noncompete agreements for well being care professionals in Texas, beginning September 1, 2025. Most notably, SB 1318 limits the length and scope of a noncompete to at least one yr post-employment and 5 miles from the supplier’s major apply website. It additionally takes restrictions that beforehand utilized solely to physicians and makes them relevant to dentists, doctor assistants, and nurses. 

Backdrop: Current Texas Regulation

Part 15.50(b) of the Texas Enterprise and Commerce Code governs noncompete agreements for physicians licensed by the Texas Medical Board. It gives that noncompete agreements for physicians are solely enforceable when the settlement:

• Doesn’t deny the doctor entry to the listing of sufferers whom the doctor had seen or handled inside one yr of the top of the employment relationship;
• Supplies entry to customary affected person medical information for an affordable charge;
• Supplies a buy-out provision for an affordable worth or as agreed by the events; and
• Permits the doctor to proceed treating particular sufferers or these with acute sicknesses after employment has been terminated.

In apply, many physicians in Texas have been permitted to purchase out their noncompete agreements for one yr’s compensation.

SB 1318 Amendments

SB 1318, which isn’t retroactive, amends Part 15.50(b). Along with increasing the scope of the restrictions in Part 15.50(b) to incorporate dentists, physicians’ assistants, and nurses, SB 1318 consists of the next key provisions:

• A noncompete’s temporal scope can’t exceed one yr post-employment;
• A noncompete’s geographic scope can’t exceed 5 miles from the supplier’s major apply website;
• A noncompete’s required buyout provision should be “in an quantity that’s not better than the doctor’s whole annual wage and wages on the time of termination of the contract or employment,” which codifies what has been widespread apply regarding such buy-outs; and
• With respect to physicians, a noncompete is void if the doctor is involuntarily discharged with out good trigger. “Good trigger” is outlined as “an affordable foundation for discharge of a doctor from contract or employment that’s immediately associated to the doctor’s conduct, together with the doctor’s conduct on the job or in any other case, job efficiency, and contract or employment report.”

Underneath SB 1318, “nurse” encompasses any individual licensed beneath Chapter 301, Occupations Code, to engaged in vocational nursing. Chapter 301 imposes licensure necessities on registered nurses, licensed vocational nurses, vocational nurses, licensed sensible nurses, sensible nurses, skilled nurses, graduate nurses, and “some other designation tending to indicate that [a] individual [is] entitled to apply nursing.” 

Conclusion

In mild of those new restrictions, employers anticipating to enter noncompete agreements with physicians, nurses, dentists, or doctor assistants in Texas ought to work with counsel to ensure their agreements meet these new requirements. As a result of SB 1318 is just not retroactive, employers probably don’t have to amend current agreements to carry them into compliance with the brand new legislation. Nonetheless, they need to keep in mind that any preparations entered into after September 1, 2025, can be restricted to the strict one-year/five-mile necessities. State legislation concerning noncompetition agreements is steadily altering, so employers are inspired to take an in depth have a look at their agreements to find out whether or not there’s a purpose to replace them. We are going to proceed to observe and report on developments on this extremely dynamic space of legislation.

Foley is right here that can assist you deal with the brief and long-term impacts within the wake of regulatory modifications. We’ve got the assets that can assist you navigate these and different vital authorized concerns associated to enterprise operations and industry-specific points. Please attain out to the authors, your Foley relationship accomplice, or to our Labor & Employment Apply Group and Well being Care & Life Sciences Sector with any questions.

This text was ready with the help of 2025 Dallas summer time affiliate JJ Gramlich.