Trade Secrets & Employee Mobility

As state legislatures continue to reshape the landscape of restrictive covenants in the wake of federal uncertainty, Texas is one of the latest to amend its existing laws governing non-compete agreements for healthcare workers. Texas Senate Bill (SB) 1318, which takes effect on September 1, 2025, tightens Texas’ already well-regulated statute by further restricting the enforceability standards for physician non-competes and, for the first time, extends similar restrictions to other licensed healthcare practitioners. 

Key Changes to Physician Non-Compete Agreements

In June 2025, Texas Governor Greg Abbott signed SB1318 into law, which, effective September 1, 2025, revises Sections 15.50 and 15.52 of the Texas Business & Commerce Code, and adds a new Section 15.501.

Joining many other states that in recent years have enacted laws regarding physician non-competition agreements, Indiana recently enacted a statute that will place restrictions on such agreements which are originally entered into on or after July 1, 2020.

Under Pub. L. No. 93-2020 (to be codified in part as Ind. Code § 25-22.5-5.5) (2020), which will take effect on July 1, 2020, for a non-compete to be enforceable against a physician licensed in Indiana, the agreement must contain the following provisions:

1. A provision that requires the employer of the physician to provide the ...

[caption id="attachment_1673" align="alignright" width="115"] David J. Clark[/caption]

Last month, two New England states enacted laws restricting the use of non-competition provisions in agreements governing an employment, partnership or other professional relationship of a physician.

Broadly speaking, the aim of both of these laws is to protect patients’ choice regarding medical care by limiting the ability of employers or partners to contract with physicians such that the physicians’ ability to practice medicine would be restricted at the end of the professional ...