Occupation limits
Iowa Non-Compete Law (2026): Common law; courts narrow
Iowa has no general noncompete statute, so enforceability turns on a three-part judicial test asking whether the restraint is reasonably necessary to the employer, unreasonably harsh on the worker, and harmful to the public. Courts here narrow overbroad clauses rather than discarding them, which makes outright wins for employees relatively rare. The one statutory exception arrived in June 2026, when HF 2254 barred the University of Iowa's hospitals and clinics from imposing noncompetes on their doctors, nurses, physician assistants and pharmacists.
The rule
How Iowa treats non-compete agreements
HF 2254 is easy to overstate. It is an instruction to a single public employer under the Board of Regents statute, not a healthcare noncompete ban, and a nurse at a private Iowa hospital gained nothing from it. The other underappreciated feature of Iowa law is how much the analysis shifts for independent contractors, where Ag Spectrum makes the who-built-the-customer-relationship question decisive.
If you are an employer
Iowa's blue-pencil practice gives you room to recover from imperfect drafting, but the public-interest prong bites hardest in healthcare and against rank-and-file staff, so reserve covenants for people who genuinely carry customer relationships or confidential information.
If you are a worker
Expect an Iowa court to narrow rather than nullify a broad covenant, so build your case around hardship and the absence of any real protectable interest instead of hoping the whole clause falls.
| Classification | Common-law reasonableness with a narrow public-hospital carve-out |
|---|---|
| Pay threshold | None. |
| Maximum term | No statutory limit. Iowa courts assess duration for reasonableness and have upheld terms from one to three years depending on the role, with longer restrictions surviving mainly for executives and owners. |
| Notice or consideration | None. No waiting period, no written advisory, and continued employment is generally accepted as adequate consideration for an at-will worker. |
| Primary statute | Common law; Iowa Code s. 262.9 as amended by 2026 Iowa Acts (H.F. 2254) (University of Iowa health care staff) |
Detail
What has changed, and what is still moving
Legislation 2024–2026
House File 2254, signed on June 2, 2026, is Iowa's first noncompete statute of any kind. It directs the Board of Regents to prohibit noncompete clauses in University of Iowa Hospitals and Clinics employment contracts for six categories of clinical staff, and it reaches contracts entered, extended or renewed from that date forward. Its scope is deliberately institutional rather than statewide - private Iowa hospitals and every other employer remain untouched.
Bills to watch
No significant restrictive bills pending. Two further healthcare noncompete measures were floated during the 2026 session but did not reach the floor.
Leading cases
Lamp v. American Prosthetics, Inc., 379 N.W.2d 909 (Iowa 1986) - the three-part inquiry into necessity, hardship to the employee, and injury to the public. Ag Spectrum Co. v. Elder, 865 F.3d 1088 (8th Cir. 2017) - applying Iowa law, an independent contractor who built his own customer base and was not unjustly enriched cannot be held to a noncompete.
If you have one in hand
What can make a non-compete unenforceable in Iowa
- Your occupation is carved out. Common-law reasonableness with a narrow public-hospital carve-out
- 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 Iowa.
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
Iowa non-compete questions
Are non-compete agreements enforceable in Iowa?
Iowa has no general noncompete statute, so enforceability turns on a three-part judicial test asking whether the restraint is reasonably necessary to the employer, unreasonably harsh on the worker, and harmful to the public. Courts here narrow overbroad clauses rather than discarding them, which makes outright wins for employees relatively rare. The one statutory exception arrived in June 2026, when HF 2254 barred the University of Iowa's hospitals and clinics from imposing noncompetes on their doctors, nurses, physician assistants and pharmacists.
How long can a non-compete last in Iowa?
No statutory limit. Iowa courts assess duration for reasonableness and have upheld terms from one to three years depending on the role, with longer restrictions surviving mainly for executives and owners.
Is there a minimum salary for non-competes in Iowa?
No. Iowa 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 Iowa require?
None. No waiting period, no written advisory, and continued employment is generally accepted as adequate consideration for an at-will worker.
Sources
How this entry was checked
- Primary source. Common law; Iowa Code s. 262.9 as amended by 2026 Iowa Acts (H.F. 2254) (University of Iowa health care staff) — the statutory text itself.
- Secondary sources consulted. Iowa Code s. 262.9, Iowa H.F. 2254 (2026) bill history, Epstein Becker Green, Economic Innovation Group, Fair Competition Law (Beck Reed Riden), Iowa case law.
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.