Are Non-Competes Enforceable in Indiana?
Last updated: 2026-10-07 · Verified against the statutes 2026-10-07
Enforceable if reasonable
Enforced if reasonable; physician limits; courts only strike text
Indiana has no general non-compete statute; courts enforce reasonable covenants but apply a strict blue-pencil rule - they may delete overbroad, divisible language but never add terms, even if the contract invites reformation. Non-competes are banned for primary-care physicians (agreements from July 1, 2023) and for physicians employed by hospitals, hospital systems and their affiliates (agreements from July 1, 2025). Other physician non-competes must include patient-notice, record-access and buyout terms.
Check a non-compete
Answer a few questions; the result cites the statute behind each point. Rules verified 2026-10-07. Saved only in your browser.
Thresholds are measured differently by state (salary, cash compensation, W-2 box 1).
Enforceable if reasonable
Indiana enforces non-competes that protect a legitimate business interest and are reasonable in time, geography and scope.
- Indiana: Enforced if reasonable; physician limits; courts only strike text. IC 25-22.5-5.5 (physician non-competes)
- If employment ends by layoff or termination without cause: Physicians only: a non-compete is unenforceable if the employer terminates without cause, the physician terminates for cause, or the contract expires with obligations fulfilled (from July 1, 2023). IC 25-22.5-5.5 (physician non-competes)
Other Indiana rules to check
- If a court finds it too broad: Courts may strike overbroad words (blue pencil) but won't rewrite.
General information, not legal advice. Enforceability also depends on the exact wording, the employer's legitimate interest and the facts; talk to an employment lawyer before relying on it.
Indiana non-compete rules
- Layoffs / firing without cause
- Physicians only: a non-compete is unenforceable if the employer terminates without cause, the physician terminates for cause, or the contract expires with obligations fulfilled (from July 1, 2023).
- Overbroad covenants
- Courts may strike overbroad words (blue pencil) but won't rewrite
Profession-specific rules
- VoidNon-competes between a physician and a hospital, hospital parent, affiliated manager or hospital system originally entered into on or after July 1, 2025 are void (1-year employee non-solicits and NDAs still allowed). (effective July 1, 2025) SEA 475 (2025), P.L. 207-2025
- VoidPrimary-care physicians (family medicine, general pediatrics, internal medicine) may not enter non-competes originally entered into on or after July 1, 2023; other physician non-competes must give patients notice and contact information, record access and a reasonable buyout option. (effective July 1, 2023) SEA 7 (2023), P.L. 165-2023
Recent and pending changes
- July 1, 2025: SEA 475: hospital-employed physician non-competes void. SEA 475 (2025)
- July 1, 2023: SEA 7: primary-care physician ban, termination rule and buyout mediation. SEA 7 (2023)
Pending: SB 132 (2026), banning non-competes for employees paid under $150,000, was referred to Senate Judiciary on January 5, 2026 and did not advance.
Federal law
There is no federal ban on employee non-competes. The FTC's 2024 Non-Compete Clause Rule (16 CFR Part 910), which would have voided most non-competes from September 4, 2024, never took effect: a Texas federal court set it aside nationwide on August 20, 2024 (Ryan LLC v. FTC). On September 5, 2025 the Commission voted 3-1 to drop its appeals and accept that ruling, and on February 12, 2026 it formally removed Part 910 from the Code of Federal Regulations. State law therefore decides whether a non-compete is enforceable.
Frequently asked questions
Are non-competes enforceable in Indiana?
Enforced if reasonable; physician limits; courts only strike text. Indiana has no general non-compete statute; courts enforce reasonable covenants but apply a strict blue-pencil rule - they may delete overbroad, divisible language but never add terms, even if the contract invites reformation. Non-competes are banned for primary-care physicians (agreements from July 1, 2023) and for physicians employed by hospitals, hospital systems and their affiliates (agreements from July 1, 2025). Other physician non-competes must include patient-notice, record-access and buyout terms.
Did the FTC ban non-competes in Indiana?
No. The FTC's 2024 rule never took effect — a federal court set it aside in August 2024, the FTC dropped its appeals in September 2025 and removed the rule from the Code of Federal Regulations in February 2026. State law controls, though the FTC still challenges some non-competes case by case.
Official Sources
Figures checked against these sources on 2026-10-07Other states
Same category (Enforceable if reasonable): Alaska, Arizona, Connecticut, Delaware, Iowa, Kansas, Kentucky, Mississippi
Protect information instead with a confidentiality agreement (NDA generator), or hiring in Indiana? Use the offer letter generator.
Not legal advice. Enforceability depends on the agreement's wording and the facts; consult an employment attorney licensed in Indiana.