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A Physician Non-Compete Agreement Must Include a Buy-Out Provision

/ 10/14/2010

Many employers and Texas physicians enter into covenant not to compete agreements (also known as non-compete agreements).  These agreements typically prevent a doctor from practicing medicine within a certain territory surrounding the employer for a certain period of time after the employment relationship terminates.

Keith Clouse, a Dallas, Texas employment lawyer who frequently advises doctors regarding non-compete agreements, notes that for a non-compete agreement to be enforceable against a physician, it must satisfy requirements in addition to the general requirements that apply to all non-compete agreements. 

For example, unlike in other industries, a physician’s employer must contractually provide the physician with the option to pay the employer for a release from the non-compete’s terms.  Specifically, the covenant not to compete must provide for a buy out at a reasonable price, or, at the option of either party, as determined by a mutually agreed upon arbitrator, or, if the parties cannot agree on an arbitrator, by an arbitrator of the court.  If a non-compete agreement does not include a buy-out clause, a court will not enforce the agreement against a physician.

To speak to Mr. Clouse or to another employment law attorney about a non-compete agreement, please contact the Dallas employment lawyers at [email protected].


Press Release Contact Information:


Clouse Dunn
Khoshbin LLP

214.220.3833 ( fax)
[email protected]

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