There is no “rule of thumb” about what geographic non-compete restraints in physician contracts are reasonable, and medical practices need to consider what geographic restraints they need to put in place in order to protect a legitimate business interest, such as confidential information, trade secrets, goodwill, or patient base.
Whether a medical practice can bind a physician with a non-compete agreement depends on where the medical practice is located and which state’s law governs the contract. Some states – California, Oklahoma, Alabama, North Dakota, Massachusetts, and Rhode Island – either prohibit all employment non-compete agreements or physician employment non-competes specifically. Meanwhile, Texas, New Mexico, Colorado, Indiana, Tennessee, West Virginia, District of Columbia, Connecticut, and Delaware have special rules regarding physician non-competes.
In Texas, non-compete agreements that relate to the practice of medicine must meet certain statutory requirements in addition to the consideration and reasonableness conditions discussed here.