The Texas Medical Association continues to receive reports of physician concerns over noncompete agreements, underscoring medicine’s ongoing legislative and regulatory advocacy efforts to strike a balance that works for physician employers and employed physicians alike.
Amid those advocacy efforts and shifting attitudes at the state and federal levels, TMA offers several resources for physicians navigating such contracts.
During the 2023 regular session, the Texas Legislature expressed interest in looking at noncompetes. The heavily-negotiated, physician-specific provisions of current state law, enacted in 1999 and last amended in 2009, allow noncompetes if certain statutory requirements are met, such as providing a buy-out provision.
Over the past decade, however, a growing number of Texas physicians have opted for employment – and with it, noncompetes, which some say have grown onerous.
Greg Fuller, MD, immediate past chair of TMA’s Council on Socioeconomics, sees how unfair noncompete agreements hamper physicians’ careers and stymie patients’ access to care. But the Keller family physician also relies on noncompetes to protect his small practice’s investment in new hires.
“The compromise is going to be making sure that a noncompete is reasonable cost-wise, geography-wise, and time-wise,” he told Texas Medicine earlier this year. “Completely getting rid of noncompetes is going to be harmful for small, independent physicians.”
Although neither bill passed, TMA worked to improve Senate Bill 1534 by Sen. Charles Schwertner, MD (R-Georgetown), and its companion, House Bill 3411 by Rep. Greg Bonnen, MD (R-Friendswood). TMA lobbyist Michelle Romero says the topic is likely to resurface next session, and this work will hopefully serve as the foundation for future fixes that serve all Texas physicians.
The Federal Trade Commission (FTC) also released a controversial proposed rule earlier this year, which seeks to ban employers from imposing or maintaining noncompetes.
“Noncompetes harm competition in U.S. labor markets by blocking workers from pursuing better opportunities and by preventing employers from hiring the best available talent,” the federal agency said in a Jan. 5 news release.
TMA is monitoring the proposal, and the American Medical Association submitted comments to FTC in April, emphasizing the importance of mitigating “unreasonable, coercive, and abusive non-competes” while still preserving independent practices’ access to such agreements.
FTC is expected to vote on its final rule regarding noncompetes in April 2024, according to Bloomberg Law.
In the meantime, Texas physicians can lean on TMA’s informational resources and their own health care attorney when dealing with noncompetes.
Amanda Hill, a health care attorney in Austin, recommends a collaborative approach.
“If you are the employer or the employee, the focus needs to be on reasonableness in time and scope,” she told Texas Medicine Today. “And in Texas, certain language needs to be in the noncompete for [it] to be enforceable.”
To coax signatures, Ms. Hill encourages physician employers to offer an advance explanation for the noncompete and even incentives, such as a bonus or an opt-out for existing employees. She adds it’s incumbent on both parties to work together to find “a solution that doesn’t feel like one side is cramming something down the other’s throat.”
Here are additional resources TMA offers to member physicians, including: