On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill 1318 (SB 1318), which will further restrict noncompete agreements for health care professionals in Texas, starting September 1, 2025. Most notably, SB 1318 limits the duration and scope of a noncompete to one year post-employment and five miles from the provider’s primary practice site. It also takes restrictions that previously applied only to physicians and makes them applicable to dentists, physician assistants, and nurses.

Backdrop: Existing Texas Law

Section 15.50(b) of the Texas Business and Commerce Code governs noncompete agreements for physicians licensed by the Texas Medical Board. It provides that noncompete agreements for physicians are only enforceable when the agreement:

• Does not deny the physician access to the list of patients whom the physician had seen or treated within one year of the end of the employment relationship;
• Provides a buy-out provision for a reasonable price or as agreed by the parties; and
• Allows the physician to continue treating specific patients or those with acute illnesses after employment has been terminated.

In practice, many physicians in Texas have been permitted to buy out their noncompete agreements for one year’s compensation.

SB 1318, which is not retroactive, amends Section 15.50(b). In addition to expanding the scope of the restrictions in Section 15.50(b) to include dentists, physicians’ assistants, and nurses, SB 1318 includes the following key...

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