If you’re a physician—or another healthcare provider—in Texas, a major new law effective September 1, 2025, changes how non-compete agreements work. These rules are designed to make contracts fairer and easier to understand.
Under the new law, a non-compete in a physician employment agreement can last no longer than one year after you leave and can only cover a five-mile radius from your primary practice location. Anything broader won’t be enforceable. If your contract includes a buyout option, the cost is now capped at the equivalent of one year of your pay, replacing the old vague standard of a “reasonable price.” Importantly, if you are terminated without “good cause,” any non-compete in your agreement is automatically void. The law also requires non-competes to be written clearly, in plain language, so you know exactly what you are signing.
This law doesn’t just apply to doctors. As of September 1, 2025, dentists, nurses (both professional and vocational), and physician assistants get the same protections—shorter non-compete periods, narrower geographic limits, capped buyouts, and easier-to-read contracts.
For physicians and other healthcare providers, this means more freedom to continue practicing, fairer exit terms, and stronger protections against unjust termination. If you’re reviewing or negotiating a contract, it’s a good time to make sure the non-compete terms comply with the new Texas law. Consulting with a physician contract lawyer can help you protect your rights and avoid signing an agreement that limits your future.
Contact the Physician Contract Lawyer now to help you review your non-compete provision to ascertain that it complies with the new Texas law.