On June 20, 2025, Texas passed Senate Bill 1318—one of the clearest signals yet that the state is serious about dialing back draconian noncompetes in healthcare.
Effective September 1, 2025, SB 1318 rewrites the rules for physician noncompetes and starts applying similar constraints to dentists, nurses, and physician assistants. Notably, the bill does not affect chiropractors. Good news for clinicians, not so much for employers relying on mobility restrictions.
Here’s what you need to know
- Duration capped at one year, no more indefinite tail periods. That shackled eternity you slipped into contracts? Gone. Noncompetes must now expire within 365 days after employment ends.
- Geographic reach limited to five miles. Urban or rural, your noncompete can’t stretch farther than a 5mile radius from your primary practice location before separation.
- Buyouts capped at annual salary and wages. You can’t demand a price tag beyond a year’s pay to release someone. Arbitration over cost? That’s out too.
- If you fire a physician without “good cause,” the noncompete is void. And “good cause” means something jobrelated. No, you can’t ghost someone and still sue them into the ground.
- For non-clinical/admin roles, the rules don’t apply. If a physician’s job is managing, directing, or purely administrative, these limits don’t bind that noncompete.
- Extends to dentists, nurses, and PAs—but with fewer protections. Those categories now face the same oneyear, fivemile, salarycapped buyout rules—but they don’t get access to patient lists, records, or acuteillness care rights.
- Preempts older laws and common law. This is the only standard that matters for covered practitioners.
What’s next
- For healthcare employers: Your contract templates need a full rewrite before September 1, 2025. Tighten your definitions of “good cause” and clarify administrative vs. clinical roles. Otherwise, expect your non-competes to fall on their face—legally and commercially.
- For providers (physicians, dentists, nurses, PAs): This is your moment to push back. Prolonged tails, broad territory, high-priced buyouts—they’re all negotiable now. If someone tries to renew an old contract after September 1, it falls under these new rules. Time to plan your exit—or your next move—with a better playing field.
In short
SB 1318 levels the playing field. It makes sense for mobility, it’s better for patient access, and it’s long overdue. But like any law, it hinges on how well the contracts are drafted and enforced. Want help tightening your language? We’re ready. Contact our healthcare attorneys at Massingill today!
Joshua Massingill
Joshua Massingill is an attorney practicing in Austin, Texas. He serves on the Texas State Bar’s Law Practice Management Committee, the Leander Educational Excellence Foundation (LEEF) Board of Directors, and the Success-Werx Board of Advisors. He mentors young entrepreneurs in Leander ISD’s INCubatorEDU program and is active in his church.
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