By: Schwertner  S.B. No. 1534          (In the Senate - Filed March 3, 2023; March 16, 2023, read   first time and referred to Committee on Health & Human Services;   April 24, 2023, reported favorably by the following vote:  Yeas 8,   Nays 1; April 24, 2023, sent to printer.)Click here to see the committee vote     A BILL TO BE ENTITLED   AN ACT     relating to restrictions on covenants not to compete for physicians   and certain other health care practitioners.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 15.50(b), Business & Commerce Code, is   amended to read as follows:          (b)  A covenant not to compete relating to the practice of   medicine is enforceable against a person licensed as a physician by   the Texas Medical Board if such covenant complies with the   following requirements:                (1)  the covenant must:                      (A)  not deny the physician access to a list of the   [his] patients whom the physician [he] had seen or treated within   one year of termination of the contract or employment;                      (B)  provide access to medical records of the   physician's patients upon authorization of the patient and any   copies of medical records for a reasonable fee as established by the   Texas Medical Board under Section 159.008, Occupations Code; and                      (C)  provide that any access to a list of patients   or to patients' medical records after termination of the contract   or employment shall not require such list or records to be provided   in a format different than that by which such records are maintained   except by mutual consent of the parties to the contract;                (2)  the covenant must provide for a buyout [buy out] of   the covenant by the physician in an amount not greater than the   physician's total annual salary and wages at the time of   termination of the contract or employment; [at a reasonable price   or, at the option of either party, as determined by a mutually   agreed upon arbitrator or, in the case of an inability to agree, an   arbitrator of the court whose decision shall be binding on the   parties; and]                (3)  the covenant must provide that the physician will   not be prohibited from providing continuing care and treatment to a   specific patient or patients during the course of an acute illness   even after the contract or employment has been terminated; and                (4)  the covenant must provide that:                      (A)  it expires within one year of termination of   the contract or employment; and                      (B)  the radius of the geographical area subject   to the covenant is not greater than five miles.          SECTION 2.  Subchapter E, Chapter 15, Business & Commerce   Code, is amended by adding Section 15.501 to read as follows:          Sec. 15.501.  COVENANT NOT TO COMPETE FOR HEALTH CARE   PRACTITIONERS. (a) In this section, "health care practitioner"   means a person licensed in this state as a dentist, nurse, or   physician assistant.          (b)  An employer may not require a health care practitioner   to enter into a covenant not to compete unless the covenant:                (1)  provides for a buyout of the covenant by the health   care practitioner in an amount not greater than the practitioner's   total annual salary and wages at the time of termination of the   practitioner's contract or employment;                 (2)  provides that it expires within one year of the   date of termination of the contract or employment; and                (3)  provides that the radius of the geographical area   subject to the covenant is not greater than five miles.          (c)  A covenant not to compete entered into by a health care   practitioner that fails to comply with Subsection (b) is void and   unenforceable.          SECTION 3.  Section 15.52, Business & Commerce Code, is   amended to read as follows:          Sec. 15.52.  PREEMPTION OF OTHER LAW. The criteria for   enforceability of a covenant not to compete provided by Sections    [Section] 15.50 and 15.501 [of this code] and the procedures and   remedies in an action to enforce a covenant not to compete provided   by Section 15.51 [of this code] are exclusive and preempt [any]   other law, including [criteria for enforceability of a covenant not   to compete or procedures and remedies in an action to enforce a   covenant not to compete under] common law [or otherwise].          SECTION 4.  The changes in law made by this Act apply only to   a covenant not to compete entered into or renewed on or after the   effective date of this Act. A covenant not to compete entered into   or renewed before the effective date of this Act is governed by the   law in effect on the date the covenant was entered into or renewed,   and the former law is continued in effect for that purpose.          SECTION 5.  This Act takes effect September 1, 2023.     * * * * *