On June 20, 2025, Texas Governor Greg Abbott signed a bill modifying Section 15.50 of the Texas Business & Commerce Code to expand the restrictions on the use of noncompetes with certain healthcare providers.
Specifically, the new law — which will take effect on September 1, 2025 — does the following:
- It makes a few changes to the existing law concerning physician noncompetes, including
- imposing a cap (in the amount of the physician’s annual salary and wages) on the price physician must pay to buy out of their noncompete;
- restricting the duration to no more than one-year limitation and the geographic reach to five miles; and
- requiring that the terms and conditions be clear and conspicuous.
- It excludes certain managerial and administrative roles from the limitations.
- It voids physician noncompetes if the physician is involuntarily discharged without “good cause,” as defined in the statute.
- It establishes new exemptions from noncompetes with dentists, professional and vocational nurses, and physician assistants, and applies the same general rules as those applicable to physicians.
What Employers Should Do:
Employers with healthcare operations in Texas should review and update physician, nurse, dentist, and PA noncompete agreements before September 1, 2025, to ensure compliance with buyout caps, duration, and geographic limits, and to address involuntary termination scenarios.
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Remember, these changes in Texas noncompete law come amid ongoing national noncompete reform efforts, including a new federal noncompete bill, the FTC’s noncompete rule saga, and state-level reforms.
So far this year, there have were ten new noncompete laws passed in nine different states, and we’re still waiting to see what happens in Florida (in the next few days).
The states passing new laws this year are Arkansas (effective August 3, 2025), Colorado (effective August 6, 2025), Indiana (effective July 1, 2025), Montana (effective April 15, 2025, and January 1, 2026, respectively), Oregon (effective June 9, 2025), Texas (effective September 1, 2025), Utah (effective May 7, 2025), Wyoming (effective July 1, 2025), and Virginia (effective July 1, 2025).
Those developments are, of course, separate from the ordinary-course wage calculation updates and important state court developments, such as in Washington.
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Firm resources:
We know how hard it is to keep up with the ever-changing laws and requirements around the country for how you can protect your trade secrets, customer goodwill, and the integrity of your workforce. To help, we have created the resources below (available for free). Each chart is regularly updated to reflect the latest developments.
 | 50-State Noncompete Law Chart, the first of its kind and regularly updated (downloadable PDF) (to be updated for the new exemptions in Illinois and Pennsylvania)50-State and Federal Trade Secret Law Chart, providing a comparison of the trade secrets laws nationally to the Uniform Trade Secrets Act (downloadable PDF) |
 | Chart of Noncompete “Low-Wage” Thresholds and Criteria (downloadable) |
 | Notice requirements summary chart, providing details for each of the 8 states (plus D.C.) that has notice requirements related to noncompetes (downloadable PDF) |
 | “Changing Trade Secrets | Noncompete Laws” (dedicated blog page) now provides a current detailed summary of the changing landscape of trade secret laws and noncompete laws around the country, state by state and at the federal level |
 | Trade secret and other legitimate business interest protection plan strategy and checklist |
We hope you find all of these resources useful. More will be coming.
And please note, we are grateful for all of the input we’ve received over the years. We welcome any suggestions for improvements that you may be willing to share.
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A huge thank you to Erika Hahn for all of her extraordinary help in tracking and monitoring all of the recent noncompete and trade secret legislative and caselaw developments.