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Texas has enacted Senate Bill 1318 (SB 1318), which brings major changes to the state’s noncompete for healthcare professionals. Effective September 1, 2025, the new law extends protections that once applied only to physicians to a broader set of licensed providers. While the goal is to increase mobility for healthcare workers, employers who rely on non-competes will need to take a fresh look at their agreements and retention strategies.

Who’s covered—and who’s not

SB 1318 applies to non-competes with physicians, dentists, physician assistants, and nurses (including advanced practice nurses). These agreements will now be subject to stricter rules regarding buyout rights, scope, and enforceability.

Excluded from the new requirements are podiatrists, non-clinical administrators, and physicians who serve solely in administrative or leadership roles. The law also applies only to agreements signed or renewed on or after September 1, 2025, though courts may look to these new standards when assessing fairness in existing agreements.

What’s changing?

For covered providers, SB 1318 imposes the following restrictions:

• Buyout requirement with cap: All non-competes must include a clear and conspicuous buyout clause. The provider must have the option to void the restriction by paying an amount no greater than their annual salary and wages at the time of termination. This replaces the older “reasonable amount” standard.
• Tighter duration and...

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