Are Non-Competes Enforceable in Iowa?
Last updated: 2026-10-07 · Verified against the statutes 2026-10-07
Enforceable if reasonable
Enforced if reasonable; void for mental-health pros
Iowa has no general non-compete statute. Courts ask whether the covenant is needed to protect the business, not unreasonably restrictive of the employee and not against the public interest, and absent employer bad faith they enforce an overbroad covenant to the extent reasonable. Statutes void practice restrictions on licensed mental-health professionals and bar health-care staffing agencies from using non-competes; a 2026 law also bars non-competes for University of Iowa Hospitals and Clinics clinicians.
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
Iowa enforces non-competes that protect a legitimate business interest and are reasonable in time, geography and scope.
- Iowa: Enforced if reasonable; void for mental-health pros. Iowa Code 147.161 (mental-health professionals)
Other Iowa rules to check
- If a court finds it too broad: Courts may narrow an overbroad covenant to what's reasonable.
- Penalties: Health-care employment agencies that use non-competes face a $25,000 penalty for a first violation and loss of registration for a second.
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.
Iowa non-compete rules
- Statute
- Iowa Code 147.161 (mental-health professionals)Iowa Code 135Q.2 (health-care employment agencies)
- Overbroad covenants
- Courts may narrow an overbroad covenant to what's reasonable
- Penalties
- Health-care employment agencies that use non-competes face a $25,000 penalty for a first violation and loss of registration for a second.
Profession-specific rules
- VoidEmployers may not limit where a licensed mental-health professional practices, bar contact with former patients, or impose time restrictions; such terms are void whenever entered. (effective June 1, 2023) Iowa Code 147.161 (2023 Acts ch. 120)
- VoidHealth-care employment (staffing) agencies may not include non-compete clauses in contracts with agency workers or health-care entities (narrow exception for certain foreign-worker placements). Iowa Code 135Q.2
- VoidThe Board of Regents must bar University of Iowa Hospitals and Clinics from using non-competes with physicians, PAs, ARNPs, nurses and pharmacists in contracts entered, extended or renewed from June 2, 2026 (UIHC only). (effective June 2, 2026) HF 2254 (2026)
Recent and pending changes
- June 2, 2026: HF 2254: UIHC clinician non-compete ban (effective on enactment). HF 2254 (2026)
- May 9, 2024: Penalties added for health-care employment agencies, including $25,000 for using non-competes. 2024 Acts ch. 1157
- June 1, 2023: Mental-health professional practice restrictions made void (HF 93). 2023 Acts ch. 120
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 Iowa?
Enforced if reasonable; void for mental-health pros. Iowa has no general non-compete statute. Courts ask whether the covenant is needed to protect the business, not unreasonably restrictive of the employee and not against the public interest, and absent employer bad faith they enforce an overbroad covenant to the extent reasonable. Statutes void practice restrictions on licensed mental-health professionals and bar health-care staffing agencies from using non-competes; a 2026 law also bars non-competes for University of Iowa Hospitals and Clinics clinicians.
Did the FTC ban non-competes in Iowa?
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, Indiana, Kansas, Kentucky, Mississippi
Protect information instead with a confidentiality agreement (NDA generator), or hiring in Iowa? Use the offer letter generator.
Not legal advice. Enforceability depends on the agreement's wording and the facts; consult an employment attorney licensed in Iowa.