Are Surgery Centers’ Non-Compete Agreements Valid in Texas?

In recent years, it has become quite common for surgeons to become part owners of free-standing ambulatory surgery centers in Texas. Often, their purchase of the ownership comes with the strings attached – a requirement that they perform a certain number of surgeries at that particular ACS and that they do not compete with the ACS within a certain geographic radius.

What is a Reasonable Geographic Area for Physician Non-Compete Agreements?

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.

Physician Non-Compete Clauses

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.