USA – TEXAS Law and Practice Contributed by: Alana Ackels and Katie Beaird, Bell Nunnally & Martin
against a licensed physician if the covenant complies with all the following requirements. • The non-compete may not deny the physician access to the list of patients whom the medical professional saw or treated within the year imme - diately preceding termination of the contract or employment. • The non-compete must provide access to medical records of the medical professional’s patients upon authorisation from the patients. • The non-compete must provide that patient lists or medical records can be provided in the format in which they are normally maintained, unless the parties agree otherwise. • The non-compete must provide for a buyout of the covenant by the physician. The buyout is capped at the medical professional’s total annual salary and wages at the time of termination of the con - tract or employment. • The non-compete must provide that the medi - cal provider 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. A non-compete for medical professionals cannot last for more than one year starting from the date the contract or employment was terminated, and cannot cover more than a five-mile radius from the location at which the medical provider primarily practiced prior Although outside the scope of this employment-relat - ed article, it is important to note that non-competes in the context of a sale of business are given much greater deference in Texas. These non-competes are allowed to be much broader than non-competes in the employment context. Possible Nationwide Ban on Non-Competes A current federal regulation issued by the Federal Trade Commission (FTC) seeks to ban all non-competes in the employer–employee context. Lawsuits have been filed to block the ban and, in August 2024, a Texas judge blocked the FTC rule, which went into effect on to the termination. Sale of a Business
4 September 2024. The ruling will be appealed and work its way through the appellate courts. If the regu - lation goes into effect, nearly all non-competes across the USA in the employer–employee context will be invalidated. Practitioners should follow this litigation closely before advising clients on non-compete mat - ters at the state level. Further information on the prospective ban on non- competes can be found in the USA – Texas Trends and Development chapter in this guide – in which non- competes are discussed in more detail. 2.2 Non-Solicits Non-solicitation agreements are often referred to as non-competes, but the two are not synonymous. Whereas a non-compete prohibits an employee from working elsewhere (within certain temporal, geo - graphic and industry limitations), a non-solicit allows the employee to work anywhere but prohibits the employee from soliciting certain categories of people – typically the people they worked with during their employment (including employees, vendors, contrac - tors, customers and investors). In Texas, non-solicits are treated very similarly to non-competes in terms of enforcement. They must be reasonable in time, geography and scope and nar - rowly tailored to protect the business interest at issue. Practitioners should tie the non-solicit to the relation - ships at risk that they are trying to protect. By way of example, the non-solicit could prevent a departing employee from taking their team with them – although a court may not enforce a non-solicit that prohibits the hiring of any person who works for the company, even if they never spoke to or interacted with the departing employee. Such a broad non-solicit could run afoul of antitrust rules. There is a growing trend in Texas and many other states to remove non-competes from agreements and rely on non-solicits to protect the applicable business interest. In other words, the employee can go work wherever they want, but they cannot solicit the com - pany’s employees, customers, etc. Non-solicitation agreements are not subject to the FTC ban on non-competes (see 2.1 Non-Competes ),
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