Occupation limits
Indiana Non-Compete Law (2026): Allowed; physicians exempt
Indiana still resolves ordinary noncompete disputes with common-law reasonableness, and it does so without a wage floor, a duration cap, or any notice formality. What has changed is medicine: since July 2025 a physician cannot be bound by a noncompete to a hospital or hospital system, on top of the 2023 ban covering primary care physicians. For everyone else the practical constraints are consideration and drafting precision, since Indiana courts will delete an overbroad term but will not write a better one.
The rule
How Indiana treats non-compete agreements
The physician ban is narrower than its headlines: it targets hospital-affiliated employers specifically, so a covenant with an independent physician group, an ambulatory surgery center or a rural emergency hospital can still be enforced. And because SEA 475 is not retroactive, two doctors at the same hospital can face opposite outcomes depending on which side of July 1, 2025 they signed.
If you are an employer
Give existing employees real new value when you ask them to sign, and draft each restriction so it can survive on its own - Indiana will cross out language it dislikes but will never supply replacement wording.
If you are a worker
If you are a physician who signed with a hospital or hospital system after July 1, 2025, the noncompete is void; if you are anyone else who signed mid-employment and got nothing new for it, the consideration defense is your strongest opening.
| Classification | Common-law reasonableness plus physician-specific bans |
|---|---|
| Pay threshold | None. The $150,000 floor that appears in circulating summaries came from SB 132, which died in committee in February 2026 and never became law. |
| Maximum term | No statutory ceiling for the general workforce. Reasonableness governs, and Indiana courts have most comfortably enforced terms in the one-to-two-year range tied to the territory the employee actually served. |
| Notice or consideration | No review period or advisory. Consideration is the live issue instead: an employee who signs after being hired must receive something of independent value - a raise, a promotion, a bonus, expanded benefits - because continued at-will employment on its own will not support the covenant. |
| Primary statute | Ind. Code ss. 25-22.5-5.5-1 to -4 (physicians); no general noncompete statute - common law otherwise |
Detail
What has changed, and what is still moving
Legislation 2024–2026
Senate Enrolled Act 475, effective July 1, 2025, is the significant development. It prohibits noncompete agreements between a physician and a hospital, a hospital's parent company, an affiliated hospital manager, or a hospital system, and it defines 'noncompete' broadly enough to catch any provision that restricts or penalizes practicing medicine after employment ends. Freestanding facilities, rural emergency hospitals and psychiatric institutions fall outside it, and it reaches only agreements signed on or after July 1, 2025. It builds on SEA 7 (2023), which had already voided primary care physician noncompetes.
Bills to watch
No significant restrictive bills pending. SB 132, which would have voided noncompetes for employees earning under $150,000, died in committee on Feb. 27, 2026 without a hearing.
Leading cases
Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019) - Indiana will strike an unreasonable term but will not redraft the covenant, and an agreement that bars competition without any tie to a protectable interest fails. Clark's Sales & Service, Inc. v. Smith, 4 N.E.3d 772 (Ind. Ct. App. 2014) - illustrates how narrowly the blue-pencil power is applied.
If you have one in hand
What can make a non-compete unenforceable in Indiana
- Your occupation is carved out. Common-law reasonableness plus physician-specific bans
- The scope is wider than the interest behind it. A restriction that reaches beyond the customers, trade secrets or goodwill the employer can actually point to is the most common reason a covenant fails in Indiana.
Whether any of these applies turns on the wording of your own agreement, your role and the case law your court follows. This page maps the statutory landscape; it does not replace advice on a specific contract.
FAQ
Indiana non-compete questions
Are non-compete agreements enforceable in Indiana?
Indiana still resolves ordinary noncompete disputes with common-law reasonableness, and it does so without a wage floor, a duration cap, or any notice formality. What has changed is medicine: since July 2025 a physician cannot be bound by a noncompete to a hospital or hospital system, on top of the 2023 ban covering primary care physicians. For everyone else the practical constraints are consideration and drafting precision, since Indiana courts will delete an overbroad term but will not write a better one.
How long can a non-compete last in Indiana?
No statutory ceiling for the general workforce. Reasonableness governs, and Indiana courts have most comfortably enforced terms in the one-to-two-year range tied to the territory the employee actually served.
Is there a minimum salary for non-competes in Indiana?
No. Indiana sets no income floor, so pay alone does not decide whether a covenant binds you. The test is whether the restriction goes further than the employer's legitimate interest requires in time, geography and scope of work.
What notice or consideration does Indiana require?
No review period or advisory. Consideration is the live issue instead: an employee who signs after being hired must receive something of independent value - a raise, a promotion, a bonus, expanded benefits - because continued at-will employment on its own will not support the covenant.
Sources
How this entry was checked
- Primary source. Ind. Code ss. 25-22.5-5.5-1 to -4 (physicians); no general noncompete statute - common law otherwise — the statutory text itself.
- Secondary sources consulted. Ind. Code s. 25-22.5-5.5, Indiana SEA 475 (2025) and SEA 7 (2023), Foley & Lardner, Hall Render, Jackson Lewis, Indiana General Assembly bill records.
Check it against a third party
None of these is ours. If a figure here matters to a decision, verify it:
- Federal Trade Commission — non-compete hub
- Economic Innovation Group — State Noncompete Law Tracker
- Fair Competition Law (Beck Reed Riden) — 50-state legislation tracker
- GAO-23-103785 — Noncompete Agreements (May 2023)
This page is general legal information published by Jurizmo and is not legal advice, does not create an attorney-client relationship, and may not reflect amendments enacted after the review date above. Consult a licensed attorney in the relevant state before acting on any agreement.