Non-Competes and Restrictive Covenants When You Exit a Practice

August 9, 2026

You spent years building patient relationships and clinical credibility. Then you decide to leave, and a non-compete suddenly controls where you can work.

Can you practice within ten miles? Can you contact former patients? If your exit is a transaction rather than a resignation, our complete guide to selling a medical practice in Texas explains how covenants are negotiated in a sale.

Here is how physician restrictive covenants in Texas actually work.

What Are Restrictive Covenants in a Physician Employment Agreement?

These clauses limit what you can do after the relationship ends. They take three forms.

Non-Compete Clauses

Bar you from practicing within a defined area for a set period, such as fifteen miles for two years.

Non-Solicitation Clauses

Bar you from recruiting former patients or colleagues. A patient finding you independently is different.

Confidentiality and Non-Disclosure Agreements

Bar you from using proprietary business information, patient data or operational systems.

All three often sit in one contract. Review yours with a healthcare employment attorney before signing.

How Does Texas Law Treat Physician Non-Compete Agreements?

The Texas Covenants Not to Compete Act

Under Business and Commerce Code Section 15.50, a non-compete is enforceable only if:

It is ancillary to an otherwise enforceable agreement
Its time, geographic and activity limits are reasonable

Texas courts can reform an overbroad clause instead of voiding it, so an excessive restriction does not simply disappear.

Physician-Specific Protections Under Texas Law

Section 15.50(b) requires that a physician non-compete include:

A buyout at a reasonable price
Access to your prior-year patient list on request
Continuing care for acute patients during the restriction

A clause missing these can be challenged. For context, see healthcare business operations.

What Makes a Non-Compete Enforceable in Texas?

Geographic Scope

A five to ten mile radius around your location is far more defensible than a metro-wide or statewide ban.

Duration of the Restriction

Courts generally treat one to two years as reasonable. Three to five years invites modification.

Scope of Activity

The restriction must track the work you did. Barring a cardiologist from all medicine is overbroad.

Consideration Provided

Something must be given in exchange: the job, confidential information or specialized training.

This is why contract review pays for itself.

What Happens When You Leave a Practice Without Addressing the Non-Compete?

Common Consequences of Ignoring a Non-Compete

Injunctive relief that halts your new practice
Monetary damages if the employer shows harm
Reputational risk from public litigation
License questions where conduct raises ethics issues

Even a flawed clause creates cost and delay.

Can a Physician Buy Out of a Non-Compete in Texas?

Yes, and the right is widely underused.

How the Buyout Works

The price must be reasonable, and a court can decide that if you disagree. A buyout usually beats litigation on time and cost.

What If the Contract Does Not Include a Buyout Provision?

Its absence is a statutory defect that leaves the clause vulnerable. A Texas healthcare employment attorney catches this while it is still negotiable.

What Rights Do Patients Have When a Physician Leaves?

Patients choose their physician, may request records, and may follow you.

The Patient Notification Obligation

Both sides must notify patients. The Texas Medical Association publishes guidance and the Texas Medical Board has abandonment rules. Notifying is not soliciting.

The Patient List Requirement

Request your prior-year patient list and you are entitled to it. It supports proper care transitions.

How Does Exiting a Business Partnership Differ from Leaving Employment?

Partnership Agreements and Operating Agreements

Ownership adds its own covenants, buyout mechanics and transfer restrictions.

The Sale of a Practice

Sale-based covenants are enforced more readily because you were paid for the restriction. On the buying side, see our guide to buying a practice in Texas.

What Strategies Can Physicians Use to Negotiate Better Restrictive Covenants?

Before You Sign

Narrow the geography to where you practice
Reduce the duration toward twelve months
Limit the scope to your specialty
Fix the buyout price while you have leverage
Add a carve-out for termination without cause

When You Are Already Leaving

Request your patient list in writing
Get the buyout price assessed
Document communications
Avoid contact resembling solicitation
Consult counsel before acting

For ownership exits, see buy-in agreements and calculating a buy-in.

What Is the Federal Position on Physician Non-Competes?

The 2024 FTC rule banning most non-competes was blocked in federal court, so Texas law still governs your agreement. The American Medical Association opposes physician non-competes, but policy trends do not change your obligations.

What Role Does the Non-Compete Play in Multi-Location or MSO Structures?

A covenant may cover every location in an MSO-managed network, effectively closing a metro area. Confirm the territory before signing. See Texas MSOs and what an MSO is.

What Are the Most Common Mistakes Physicians Make with Non-Competes?

Mistake	Do This Instead
Signing without reading	Have counsel review it
Assuming it is unenforceable	Get an assessment first
Contacting patients early	Follow notification rules
Skipping the patient list	Request it in writing
Overlooking the buyout	Price it with counsel
Waiting for conflict	Engage counsel early

How Does a Healthcare Attorney Help When You Are Exiting a Practice?

A Texas healthcare employment attorney gives you:

An enforceability assessment
Buyout or narrowing negotiations
Notification guidance that avoids abandonment claims
Protection from steps that trigger a breach
Representation against an injunction

For licensing questions, see Texas licensing defense.

What Should You Review Before Leaving Any Practice?

A Pre-Exit Legal Checklist for Physicians

Re-read every restrictive covenant
Note the geography, duration and activity limits
Confirm the buyout right and price
Review any ownership agreements
Check resignation notice requirements
Check deferred pay, bonus and loan repayment terms
Consult counsel before giving notice
Request your patient list
Coordinate patient transitions
Document communications

Opening your own clinic? See practice set-up and business formation.

How Do Restrictive Covenants Apply Differently Across Practice Types?

Hospital-Employed Physicians

Systems enforce aggressively, and their covenants cover wide service territories.

Private Group Practices

Groups enforce to protect patient and referral relationships, often adding non-solicitation.

Physician-Owned Practices

Your exit implicates both employment and ownership documents, which must be coordinated.

Urgent Care and Retail Health Clinics

Broad standard language is easier to challenge given transactional patient relationships.

A competing clinic must be structured under Texas corporate practice of medicine rules.

“The best protection against a restrictive covenant problem is a thorough review of your contract before you ever sign it.”

Frequently Asked Questions About Physician Non-Competes and Restrictive Covenants

Are physician non-compete agreements enforceable in Texas?

Yes, when reasonable in geography, duration and activity. Texas also requires a buyout right and patient list access.

What is the maximum enforceable duration for a physician non-compete in Texas?

No hard cap, but courts generally view one to two years as reasonable. Longer terms are often modified.

Can my former employer stop me from treating patients I had a prior relationship with?

Texas requires continuing care for acute patients. Non-solicitation limits recruitment, but patients may still choose to follow you.

What happens if my non-compete is unenforceable?

It does not disappear. Your employer can still sue, and courts may reform the clause rather than void it.

Do I have to pay to get out of a non-compete in Texas?

A buyout right must be included, and it often costs less than litigation. Counsel can test whether the price is reasonable.

What if I am terminated without cause, does my non-compete still apply?

That depends on your contract. Some void the covenant on a without-cause termination, which is why the carve-out matters.

Can a non-compete affect my medical license?

A breach is civil, not licensing. The Texas Medical Board focuses on patient safety, though messy exits invite complaints.

What is the difference between a non-compete and a non-solicitation clause?

A non-compete restricts where you practice. A non-solicitation restricts who you may approach.

Should I negotiate my non-compete before or after signing my employment agreement?

Before. Leverage disappears at signature. See our physician contract review services.

Are non-competes treated differently when I sell my practice versus when I leave employment?

Yes. Sale covenants get lighter scrutiny because you were compensated; employment covenants face a stricter test.

Ready to Exit Your Practice on Your Own Terms?

Restrictive covenants need a strategy, not guesswork. If your exit is part of a deal, our step-by-step walkthrough of a Texas practice sale shows how these terms get negotiated.

At Dike Law Group PLLC, healthcare law is all we do: reviewing agreements, testing enforceability, negotiating buyouts and defending physicians.

Schedule a consultation or visit our Frisco office at 6160 Warren Parkway, Suite 100. Call (972) 290-1031.

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Disclaimer: This article is intended for general educational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a qualified Texas healthcare employment attorney.