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Are you a physician who feels trapped by a non-compete? If you practice in a smaller Texas community, leaving your employer may seem to require leaving your patients, your professional network, and even your home.
If a non-compete is controlling your next career decision, in this article we explain why physicians who practice in small communities may have more protection than they think. To learn more, read on.
How Do Non-Competes Affect Physicians in Smaller Communities?
Non-compete agreements do apply even in a small community. But, signing a non-compete does not automatically make every restriction enforceable against a physican. Texas law requires physician non-competes to meet specific statutory requirements. Courts also examine whether the restriction is reasonable.
Let’s consider an example. What if your non-compete has a geographical restriction of five miles. A five-mile restriction may be nothing a major city like Austin. You could move to a clinic outside that boundary without harming your career. But in a small town such as Bastrop, not far from Austin, the same radius may cover the community’s only hospital, all clinics, and all referral relationships.
The effect on patients may also be greater. When only one local physician provides a specialty, taking that doctor out of practice can reduce emergency coverage, disrupt established treatment, and require patients to travel much farther for care. Those burdens can fall especially hard on older adults, people with chronic conditions, and patients who are uninsured or rely on Medicare or Medicaid.
Texas courts do not evaluate a non-compete in the abstract. The agreement’s language, the employer’s legitimate business interests, the physician’s actual work, and the restriction’s real-world effect can all impact the outcome.
Courts particularly review how a non-compete will affect the public, which raises the “public interest” principle.
| What is the public interest principle? | When deciding whether a non-compete is reasonable, a court may consider whether the hospital or clinic’s need for protection is outweighed by likely harm to the public. That harm may include inadequate healthcare, interrupted continuity of care, or reduced access to a patient’s chosen physician. |
The clearest Texas example is Nacogdoches Heart Clinic, P.A. v. Pokala.
What Did the Pokala Case Decide?
In Nacogdoches Heart Clinic, P.A. v. Pokala, Dr. Vijay Pokala practiced cardiology and internal medicine in Nacogdoches. His employment agreement contained a non-compete that attempted to stop him from practicing any medicine within ten miles of the city for one year. It also required him to pay $100,000 for every month he violated the restriction.
The court found the non-compete unreasonable and unenforceable for two primary reasons. First, the restriction was too broad because it prohibited Dr. Pokala from practicing all medicine. This was particularly hard on Dr. Pokala since he had practiced only cardiology his entire career..
Second, the evidence showed that enforcing the non-compete could harm the community’s access to healthcare, especially treatment of cardiac conditions. Dr. Pokala treated indigent patients, provided significant call coverage, and cared for patients through the county hospital. The hospital administrator testified that the area already lacked enough cardiovascular physicians and that Dr. Pokala’s absence could disrupt emergency coverage and continuity of care.
The court’s decision shows that the effect on local patients may be an important part of determining whether a physician non-compete is reasonable.
What Makes a Small-Community Physician Non-Compete Vulnerable?
Working in a small community does not automatically make a physician’s non-compete invalid. The physician must be able to show how enforcement would affect patients’ access to healthcare.
Circumstances that may support a challenge include:
| Circumstance | Why it matters |
| The physician is the only – or one of very few – local providers in a specialty | Patients may lose timely access to specialized care if the physician is restricted from practicing nearby |
| Patients would have to travel a significant distance for comparable care | Travel burdens can delay treatment and reduce continuity of care, especially for chronic or urgent conditions |
| The physician treats underserved, uninsured, Medicare, or Medicaid patients | These populations may have limited or no alternative providers or transportation options |
| The physician provides important emergency or hospital coverage | Removing the physician may strain hospital staffing and reduce emergency response capacity |
| The physician performs primary care or other services beyond a stated specialty | Broad restrictions may eliminate access to general medical services in the community |
| The community has a recognized shortage of healthcare providers | Existing shortages can be worsened by enforcing restrictive covenants |
A federal Health Professional Shortage Area designation may provide useful evidence of limited healthcare resources. However, the designation does not automatically invalidate a non-compete. The physician’s actual role and the availability of comparable local care still matter.
What Does Texas Law Require?
Texas law requires the non-compete restrictions to be reasonable in their (1) duration, (2) geographic area, and (3) scope of prohibited activities. They also cannot impose a greater restriction than necessary to protect the employer’s legitimate business interests.
For physician non-competes entered into or renewed on or after September 1, 2025, Texas law also requires that the agreement:
- Last no longer than one year;
- Covers no more than five miles from the physician’s primary practice location;
- Includes a buyout capped at the physician’s annual salary and wages; and
- Protects certain patient-list, medical-record, and continuing-care rights.
A physician non-compete is also void when the physician is involuntarily discharged without good cause. Agreements signed before September 1, 2025, may be governed by an earlier version of the law, making the date of the contract especially important.
Protect Your Career Before the Issue Grows
If your contract has a non-compete, do not simply ignore it. The hospital’s or clinic’s lawyer may send you a cease-and-desist letter, seek an injunction, or contact a physician’s prospective employer. Even that non-compete is unenforceable, any legal action against you can create professional and financial problems if it is not addressed properly.
Gardner Employment Law helps Texas physicians evaluate physician non-competes and understand how their community role may affect enforceability. If you practice in a smaller community, your non-compete may be less enforceable than you believe. Are you prepared to protect your patients and your next move? We can answer that question for you.