Physician Noncompetition Agreements May Be Challenged More Often After Recent Texas Appellate Decision

A recent appellate decision out of the Beaumont Court of Appeals may throw a new wrinkle into Texas’s ever-evolving law on physician noncompetition agreements.

In Texas, physician noncompetition agreements must contain buyout provisions to be enforceable. That is, the physician must be allowed to buy his or her way out of the geographical and temporal restrictions the noncompetition agreement imposes. This requirement is unique to physicians and mandated by statute. As a practical matter, large buyout amounts have traditionally kept physicians from violating their agreements.

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