Texas Limits Non-Competes for Healthcare Workers: What You Need to Know
A new Texas law alters the application of non-competition agreements for healthcare professionals.
(Updated September 2, 2025)
A new Texas law, enacted September 1, 2025, imposes major restrictions on non-compete agreements for many healthcare professionals. If you’re a licensed clinician, these new rules could directly affect your employment contracts and career mobility. If you own or manage a practice, these changes may require you to update agreements and rethink how you protect patient relationships and business interests.
Let’s break down what you need to know and what to consider now.
New Limits on Non-Compete Agreements
For covered healthcare workers, specifically physicians, dentists, nurses, and physician assistants, the law imposes new restrictions:
- Duration Cap: A non-compete cannot extend beyond one year after your employment ends.
- Geographic Limit: The restriction is limited to a five-mile radius from your primary practice location.
- Buyout Cap: If your agreement includes a buyout option, the price cannot exceed one year’s total salary and wages.
- Clear Writing Requirement: All terms must be stated clearly and conspicuously in writing.
Special Rules for Physicians
Physicians receive an added layer of protection. If a physician is terminated without “good cause,” the non-compete is void. “Good cause” means a reasonable, conduct-based justification for discharge. This helps prevent employers from unfairly restricting physicians who lose their jobs through no fault of their own.
Additionally, physicians cannot be prohibited from providing continuing care and treatment to specific patients during an acute illness, even after their contract or employment has ended.
Who Is Excluded?
Healthcare workers in purely administrative roles, such as medical directors who don’t provide patient care, are not covered. Non-compete agreements for these roles will continue to follow Texas’s general “reasonableness” standard. Under this standard, a non-compete is enforceable only if it is reasonable in scope, duration, and geographic reach, and if it serves to protect a legitimate business interest, such as confidential information or patient relationships. Courts review each agreement on a case-by-case basis to determine whether it is fair and necessary.
What Should You Do Now?
If you’re a healthcare professional in Texas, now is the time to review your employment agreements. Understanding how your current contracts align with these new restrictions can help you plan, especially if you’re considering a job change or renegotiating terms soon.
For employers, it’s crucial to update template agreements and ensure compliance with the new restrictions to avoid future legal challenges and protect your practice’s reputation.
Why These Changes Matter
Non-compete agreements have long been a source of tension in healthcare. Employers argue they help safeguard patient relationships and confidential business information. Meanwhile, clinicians often feel these restrictions limit their professional freedom and disrupt patient care continuity.
This new law reflects Texas’s move to support patient access and give healthcare professionals more control over their careers. For many, it will mean greater freedom to move between practices or open independent clinics without facing steep financial or geographic barriers.
Get Legal Support
Curious how the new law might affect your employment contract—or your practice’s agreements with healthcare professionals? If you operate in one of the states where we have licensed attorneys, schedule a consultation to talk through your options for staying protected.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.