Signing a hospital employment contract is one of the most consequential decisions you will make as a physician. The terms you agree to today can shape your income, your autonomy and your ability to practice for years to come.
How Texas law governs non-compete clauses
Texas restricts physician non-compete agreements under Tex. Bus. & Com. Code § 15.50. A valid covenant must be reasonable in scope and duration. Courts generally limit geographic restrictions to within five miles of your primary practice location and cap the post-employment period at one year.
The agreement must also include a buyout clause at a reasonable price. Critically, the covenant cannot prevent you from treating a patient during an acute illness after your employment ends. Key terms to review in any non-compete clause include:
- Geographic scope: Confirm the radius matches the statutory limit.
- Duration: One year is generally the enforceable maximum.
- Buyout amount: The figure must be reasonable and clearly stated.
- Acute care carve-out: This patient protection must appear in writing.
Understanding these limits can help you identify language that may not hold up in court.
What to know about malpractice tail coverage
Tail coverage protects you from claims filed after you leave a position. If your policy is claims-made rather than occurrence-based, you will need tail insurance when your employment ends. This cost can range from $20,000 to $100,000 or more. Your contract should clearly state who pays for it.
How compensation structures work
Many hospital contracts start with a guaranteed base salary. After one to two years, your pay may shift to a work Relative Value Unit (wRVU) model tied to productivity. You should confirm the conversion rate, the bonus thresholds and whether those figures align with benchmarks for your specialty and region.
Understanding termination and call obligations
Most hospital contracts allow termination without cause with a 60- to 90-day written notice period. Contracts requiring longer notice periods can restrict your flexibility. For-cause terminations should include a cure period so you have time to address issues before the hospital ends your employment. Call obligations should be explicitly capped, with clear language on whether additional compensation applies above a set threshold.
Speaking with a healthcare attorney before you sign
Contract language that appears standard may carry significant risk. An attorney familiar with Texas healthcare law can help you identify terms worth negotiating. Speaking with a lawyer may clarify how these rules apply to your situation