Big Changes to Dentist Non-Competes: What You Need to Know About SB 1318
A new Texas law, SB 1318, is set to make significant changes to how non-compete agreements work for dentists. If you plan to sign a new contract or renew an existing one, you need to be aware of these new rules.
Here’s a clear breakdown of what's changing for any dental non-compete agreement signed or renewed on or after September 1, 2025.
The "Big 3" New Rules for Non-Competes
To be enforceable, any new or renewed non-compete must now include three specific limitations:
A Mandatory Buyout Option: The agreement must give the dentist a clear option to buy out the non-compete. The price for this buyout cannot be greater than the dentist’s total annual salary and wages at the time of termination.
A One-Year Time Limit: The non-compete cannot last for more than one year after your termination date.
A Five-Mile Radius Limit: The geographic restriction cannot cover a radius of more than five miles from your primary practice location.
These rules are now firm, standardized requirements for dental employment contracts in Texas.
What About Practice Sales?
This is the big question. At this point, the law is clear on how it applies to employment contracts.
What’s less clear is how it will affect non-compete agreements included in practice sales. Historically, Texas courts have sometimes treated non-competes in the sale of a medical practice similarly to those in employment contracts.
The Safest Bet: Until the courts provide specific guidance, the most prudent and safest approach is to assume these same rules (buyout, one year, five miles) also apply to non-competes within dental practice sales.
What You Should Do Now
Review Your Contracts: Carefully review any employment contract or renewal agreement you are offered that takes effect after September 1, 2025.
Check for Compliance: Ensure any non-compete language meets these three new requirements.
Consult Your Attorney: This is especially critical if you are in the process of buying or selling a practice. Have your attorney review all documents to ensure they are compliant with SB 1318.
TDA is On It
TDA’s legislative team is closely monitoring this new law and will provide updates as soon as the courts offer any clarification, particularly on the practice sales question.
SB 1318 is another reminder that legislative debate directly impacts your practice. TDA works to ensure your voice is heard at the Capitol. Through DENPAC, we maintain a strong presence, helping lawmakers understand how their decisions affect you and your patients.
Help strengthen dentistry’s voice in Texas by supporting DENPAC today.
