Report: Non-Compete Buyout Ruling in Texas May Spur Physician Contract Violations

A recent ruling by a Texas court of appeals that allows physicians an opportunity to arbitrate noncompete-clause buyouts even if an amount is stated explicitly in the contract may lead to more non-competition violations and subsequent litigations, according to a report in Lexology.

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In Sadler Clinic Association, P.A. v. Hart, a judge from the Beaumont Court of Appeals ruled that a stated buyout amount in a physician’s contract may still be arbitrated if the amount is considered to be unreasonable by the physician at the time of departure, according to the report.

The ruling could lead to more contract violations and arbitrations, as large buyout amounts in physicians’ contracts may not be as strong a deterrent if litigation is an option for physicians, according to the report.

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