On June 20, 2025, Texas enacted S.B.1318, which limits the scope of non-compete agreements applicable to licensed physicians and now, other "health care professionals."

Key Takeaways

• Texas imposes new limits on non-compete agreements with licensed physicians and health care professionals that takes effect September 1, 2025.
• To be enforceable, non-competes with these individuals must now meet strict geographic and time limitations, have a buyout cap, and use clear contract language.
• The law reflects a trend toward narrowing or prohibiting non-competes in health care.

On June 20, 2025, Texas enacted S.B.1318, which limits the scope of non-compete agreements applicable to licensed physicians and now, other "health care professionals." The law builds upon existing limitations for non-competes under Texas law, by further narrowing time and geographic limitations for practitioners, and it caps the existing buyout provision at a practitioner's total annual salary and wages at the time of termination.

The law only applies to non-competes entered into or renewed on or after September 1, 2025.

Keys to Enforceability

The new law applies only to licensed physicians and "health care practitioners," including dentists, RNs and vocational nurses, and physician assistance. It excludes administrative roles or those managing or directing care in a non-clinical capacity.

To be enforceable, non-compete agreements with physicians and health care practitioners must include a –

• Limited...

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