{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/us/indiana", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/us/indiana.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/indiana", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/indiana/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/us/indiana/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "indiana", "frontmatter": { "title": "Non-Competes in Indiana", "description": "Indiana enforces non-competes only when they are reasonable and protect a legitimate interest, applies a strict eraser-style blue pencil, and bans most physician-hospital covenants by statute.", "state": "Indiana", "lastReviewed": "2026-06-03", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "reasonable", "bottomLine": "Indiana enforces a non-compete only if the employer proves it is reasonable in time, activity, and geography and protects a legitimate interest; courts disfavor them and use a strict eraser blue pencil.", "keyLaw": "common law (Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008))", "exceptions": "Physician-hospital covenants banned (SEA 475, 2025); primary-care physician non-competes banned (SEA 7, 2023); physician covenants must meet HEA 1004", "courtNarrowing": "trimOnly", "appliesToContractors": "unclear", "extendedForBreach": "Unsettled", "maxLength": "No statutory limit", "noticeRequirement": "None", "incomeThreshold": "None", "saleOfBusiness": "Buyer-favoring standard versus employee covenants (sale/equity sale)", "customerNonSolicit": "Reasonableness test applies", "employeeNonSolicit": "Blanket no-hire overbroad" }, "about": [ "Indiana non-compete agreements", "Indiana restrictive covenants", "Heraeus Medical v. Zimmer blue pencil eraser rule", "Indiana non-compete reasonableness test", "Indiana physician non-compete statute", "Senate Enrolled Act 475 physician hospital ban", "Indiana sale-of-business non-compete standard" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ], "relatedForm": { "slug": "openagreements-restrictive-covenant-indiana" } }, "questions": [ { "slug": "employee-non-compete-enforceability", "label": "Are employee non-competes enforceable?", "heading": "Are employee non-compete agreements enforceable in Indiana?", "answerText": "Yes, sometimes. Indiana is a reasonableness state, not a general ban state for the ordinary workforce. Courts disfavor non-competes as restraints of trade, construe them strictly against the employer, and enforce them only when the restraint is reasonable and protects a legitimate business interest.", "sources": [ { "id": "krueger-strict-construction", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Central Indiana Podiatry, P.C. v. Krueger", "citation": "Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).", "url": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/", "deepLink": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/#:~:text=We%20construe%20these%20covenants%20strictly,not%20enforce%20an%20unreasonable%20restriction.", "proposition": "Krueger states that Indiana courts construe non-compete covenants strictly against the employer and will not enforce an unreasonable restriction.", "verbatimQuote": "We construe these covenants strictly against the employer and will not enforce an unreasonable restriction.", "date": "2008-03-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-krueger-strict-construction" }, { "id": "dicen-disfavored", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Dicen v. New Sesco, Inc.", "citation": "Dicen v. New Sesco, Inc., 839 N.E.2d 684 (Ind. 2005).", "url": "https://www.courtlistener.com/opinion/852724/dicen-v-new-sesco-inc/", "deepLink": "https://www.courtlistener.com/opinion/852724/dicen-v-new-sesco-inc/#:~:text=Covenants%20not%20to%20compete%20are,not%20favored%20in%20the%20law.", "proposition": "Dicen confirms that covenants not to compete are disfavored in Indiana law.", "verbatimQuote": "Covenants not to compete are not favored in the law.", "date": "2005-12-21", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-dicen-disfavored" } ] }, { "slug": "protectable-interests", "label": "What interests are protectable?", "heading": "What legitimate business interests can support an Indiana non-compete?", "answerText": "Customer goodwill, established customer relationships, trade secrets, and confidential information are the recognized interests that can justify a tailored Indiana restraint. The employer must first prove it has such an interest before any restriction will be tested for reasonableness.", "sources": [ { "id": "krueger-legitimate-interest", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Central Indiana Podiatry, P.C. v. Krueger", "citation": "Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).", "url": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/", "deepLink": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/#:~:text=In%20arguing%20the%20reasonableness%20of,be%20protected%20by%20the%20agreement.", "proposition": "Krueger requires the employer to first show a legitimate protectable interest before a non-compete will be tested for reasonableness.", "verbatimQuote": "In arguing the reasonableness of a non-competition agreement, the employer must first show that it has a legitimate interest to be protected by the agreement.", "date": "2008-03-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-krueger-legitimate-interest" }, { "id": "iutsa-trade-secret", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Indiana Uniform Trade Secrets Act, Ind. Code § 24-2-3", "citation": "Ind. Code § 24-2-3-2.", "url": "https://iga.in.gov/laws/2025/ic/titles/24", "proposition": "The Indiana Uniform Trade Secrets Act defines a trade secret by independent economic value from secrecy plus reasonable efforts to maintain secrecy.", "verbatimQuote": "\"Trade secret\" means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.", "date": "2025-01-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-iutsa-trade-secret" } ] }, { "slug": "consideration", "label": "Is continued employment enough consideration?", "heading": "Is continued at-will employment enough consideration for an Indiana non-compete?", "answerText": "Yes. In Indiana, an employer's promise to continue an at-will employee's job is valid consideration for a non-compete signed during employment — even when the employee is told to sign the new covenant or be fired.", "sources": [ { "id": "med1-consideration", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Med-1 Solutions, LLC v. Taylor", "citation": "Med-1 Solutions, LLC v. Taylor, No. 24A-PL-450 (Ind. Ct. App. Nov. 25, 2024).", "url": "https://www.courtlistener.com/opinion/10283022/med-1-solutions-llc-v-jennifer-taylor/", "deepLink": "https://www.courtlistener.com/opinion/10283022/med-1-solutions-llc-v-jennifer-taylor/#:~:text=We%20hold%20that%2C%20where%20an,consideration%20for%20the%20latter%20agreement.", "proposition": "Med-1 Solutions holds that continued at-will employment is sufficient consideration for a non-compete an employee is required to sign during employment.", "verbatimQuote": "We hold that, where an at-will employee signs a non-competition agreement as a condition of their hiring and is later told to sign a new non-competition agreement or they will be fired, the employee's continued employment can serve as consideration for the latter agreement.", "date": "2024-11-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-med1-consideration" } ] }, { "slug": "duration-limits", "label": "How much time, territory, and activity are reasonable?", "heading": "What duration, geography, and activity scope are reasonable for an Indiana non-compete?", "answerText": "There is no fixed cap. The employer bears the burden of proving the covenant is reasonable in time, activity, and geographic scope, and a restraint that bars working for a competitor in any capacity is routinely struck down as too broad.", "sources": [ { "id": "krueger-scope-burden", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Central Indiana Podiatry, P.C. v. Krueger", "citation": "Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).", "url": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/", "deepLink": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/#:~:text=The%20employer%20also%20bears%20the,activity%2C%20and%20geographic%20area%20restricted.", "proposition": "Krueger places the burden on the employer to establish that the covenant is reasonable in time, activity, and geographic scope.", "verbatimQuote": "The employer also bears the burden of establishing that the agreement is reasonable in scope as to the time, activity, and geographic area restricted.", "date": "2008-03-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-krueger-scope-burden" }, { "id": "med1-any-capacity", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Med-1 Solutions, LLC v. Taylor", "citation": "Med-1 Solutions, LLC v. Taylor, No. 24A-PL-450 (Ind. Ct. App. Nov. 25, 2024).", "url": "https://www.courtlistener.com/opinion/10283022/med-1-solutions-llc-v-jennifer-taylor/", "deepLink": "https://www.courtlistener.com/opinion/10283022/med-1-solutions-llc-v-jennifer-taylor/#:~:text=We%20find%20that%20the%20scope,the%20covenant%20is%20unreasonably%20broad.", "proposition": "Med-1 Solutions found that a covenant barring work for a competitor in any capacity restricted an unreasonably broad scope of activity.", "verbatimQuote": "We find that the scope of activity restricted by the covenant is unreasonably broad.", "date": "2024-11-25", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-med1-any-capacity" } ] }, { "slug": "court-narrowing", "label": "Will Indiana courts narrow an overbroad covenant?", "heading": "Will an Indiana court blue-pencil or reform an overbroad non-compete?", "answerText": "Only by deleting, never by rewriting. Indiana's blue-pencil doctrine is a strict eraser: a court may strike grammatically divisible unreasonable language, but it cannot add, change, or rearrange terms to save a covenant — even if the contract contains a clause inviting the court to do so.", "sources": [ { "id": "heraeus-eraser", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Heraeus Medical, LLC v. Zimmer, Inc.", "citation": "Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).", "url": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/", "deepLink": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/#:~:text=The%20doctrine%2C%20however%2C%20does%20not,adding%2C%20changing%2C%20or%20rearranging%20terms.", "proposition": "Heraeus holds that the blue-pencil doctrine does not allow a court to rewrite a non-compete by adding, changing, or rearranging terms.", "verbatimQuote": "The doctrine, however, does not allow a court to rewrite a noncompetition agreement by adding, changing, or rearranging terms.", "date": "2019-12-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-heraeus-eraser" }, { "id": "heraeus-reformation-clause", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Heraeus Medical, LLC v. Zimmer, Inc.", "citation": "Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).", "url": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/", "deepLink": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/#:~:text=Consistent%20with%20the%20history%20and,the%20power%20to%20do%20so.", "proposition": "Heraeus holds that courts cannot add terms to an unenforceable covenant even when the agreement purports to authorize the court to do so.", "verbatimQuote": "Consistent with the history and purpose of Indiana's blue pencil doctrine, courts cannot add terms to an unenforceable restrictive covenant in a noncompetition agreement—even when that agreement contains language purporting to give a court the power to do so.", "date": "2019-12-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-heraeus-reformation-clause" }, { "id": "heraeus-divisibility", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Heraeus Medical, LLC v. Zimmer, Inc.", "citation": "Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).", "url": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/", "deepLink": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/#:~:text=A%20court%20can%20blue%2Dpencil%20unreasonable,unreasonable%20portions%20have%20been%20eliminated.", "proposition": "Heraeus limits blue-penciling to covenants that are clearly divisible and that leave a reasonable restriction after the unreasonable parts are removed.", "verbatimQuote": "A court can blue-pencil unreasonable provisions from a restrictive covenant if the covenant is clearly divisible into parts and if a reasonable restriction remains to be enforced after the unreasonable portions have been eliminated.", "date": "2019-12-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-heraeus-divisibility" }, { "id": "clarks-indivisible", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Clark's Sales and Service, Inc. v. Smith", "citation": "Clark's Sales and Service, Inc. v. Smith, 4 N.E.3d 772 (Ind. Ct. App. 2014).", "url": "https://www.courtlistener.com/opinion/2725543/clarks-sales-and-service-inc-v-john-d-smith-and-ferguson-enterprises/", "deepLink": "https://www.courtlistener.com/opinion/2725543/clarks-sales-and-service-inc-v-john-d-smith-and-ferguson-enterprises/#:~:text=Paragraph%207(C)%20is%20indivisible%20and,blue%20pencil%20doctrine%20is%20inapplicable.", "proposition": "Clark's Sales holds that an indivisible, unreasonable covenant cannot be blue-penciled and the doctrine is inapplicable.", "verbatimQuote": "Paragraph 7(C) is indivisible and unreasonable as a whole, and the blue pencil doctrine is inapplicable.", "date": "2014-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-clarks-indivisible" } ] }, { "slug": "non-solicitation", "label": "Are non-solicitation and no-hire clauses enforceable?", "heading": "Are customer non-solicitation and employee no-hire clauses enforceable in Indiana?", "answerText": "They are analyzed under the same reasonableness and eraser rules as non-competes. A no-hire clause barring solicitation of all of the former employer's workers is overbroad and unenforceable; it must be narrowed to employees in whom the company has a genuine protectable interest.", "sources": [ { "id": "heraeus-nosolicit-overbroad", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Heraeus Medical, LLC v. Zimmer, Inc.", "citation": "Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).", "url": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/", "deepLink": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/#:~:text=As%20written%2C%20the%20Kolbe%20Agreement's,applies%20to%20all%20Zimmer%20employees.", "proposition": "Heraeus holds that an employee non-solicitation covenant reaching all of the company's employees is overbroad.", "verbatimQuote": "As written, the Kolbe Agreement's employee nonsolicitation covenant is overbroad because it applies to all Zimmer employees.", "date": "2019-12-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-heraeus-nosolicit-overbroad" }, { "id": "q6-krueger-interest", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Central Indiana Podiatry, P.C. v. Krueger", "citation": "Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).", "url": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/", "deepLink": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/#:~:text=In%20arguing%20the%20reasonableness%20of,be%20protected%20by%20the%20agreement.", "proposition": "Krueger's requirement of a legitimate protectable interest governs customer non-solicitation, which is defensible only when tied to customers connected to that interest.", "verbatimQuote": "In arguing the reasonableness of a non-competition agreement, the employer must first show that it has a legitimate interest to be protected by the agreement.", "date": "2008-03-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-q6-krueger-interest" } ] }, { "slug": "liquidated-damages", "label": "Are liquidated-damages clauses enforceable?", "heading": "Are liquidated-damages clauses in Indiana non-competes enforceable?", "answerText": "Only if they are a reasonable measure of anticipated loss. Indiana courts will treat a liquidated-damages provision as an unenforceable penalty when the stipulated sum is grossly disproportionate to the loss from the breach or sweeps in too much conduct.", "sources": [ { "id": "amconsulting-penalty", "authorityType": "case-law", "tier": "primary-source-backed", "title": "American Consulting, Inc. v. Hannum Wagle & Cline Engineering, Inc.", "citation": "American Consulting, Inc. v. Hannum Wagle & Cline Eng'g, Inc., 136 N.E.3d 208 (Ind. 2019).", "url": "https://www.courtlistener.com/opinion/4688172/american-consulting-inc-dba-american-structurepoint-inc-v-hannum/", "deepLink": "https://www.courtlistener.com/opinion/4688172/american-consulting-inc-dba-american-structurepoint-inc-v-hannum/#:~:text=When%20liquidated%20damages%20are%20grossly,rather%20than%20as%20liquidated%20damages.", "proposition": "American Consulting holds that liquidated damages grossly disproportionate to the loss are treated as an unenforceable penalty.", "verbatimQuote": "When liquidated damages are grossly disproportionate to the loss that results from the breach or are unconscionably in excess of the loss sought to be asserted, appellate courts will treat the sum as an unenforceable penalty rather than as liquidated damages.", "date": "2019-12-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-amconsulting-penalty" }, { "id": "amconsulting-holding", "authorityType": "case-law", "tier": "primary-source-backed", "title": "American Consulting, Inc. v. Hannum Wagle & Cline Engineering, Inc.", "citation": "American Consulting, Inc. v. Hannum Wagle & Cline Eng'g, Inc., 136 N.E.3d 208 (Ind. 2019).", "url": "https://www.courtlistener.com/opinion/4688172/american-consulting-inc-dba-american-structurepoint-inc-v-hannum/", "deepLink": "https://www.courtlistener.com/opinion/4688172/american-consulting-inc-dba-american-structurepoint-inc-v-hannum/#:~:text=In%20sum%2C%20we%20find%20that,at%20issue%20are%20unenforceable%20penalties.", "proposition": "American Consulting found the liquidated-damages provisions at issue to be unenforceable penalties.", "verbatimQuote": "In sum, we find that all of the liquidated damages provisions at issue are unenforceable penalties.", "date": "2019-12-18", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-amconsulting-holding" } ] }, { "slug": "choice-of-law-and-fees", "label": "Choice-of-law clauses and attorney's fees?", "heading": "Can an employer use a choice-of-law clause or fee-shifting to strengthen an Indiana covenant?", "answerText": "Only within limits. Indiana generally honors a forum or choice-of-law clause, but a contract for the improvement of Indiana real estate may not be made subject to another state's law or require out-of-state dispute resolution, and attorney's fees are available mainly for bad-faith or groundless litigation.", "sources": [ { "id": "forum-void-construction", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Ind. Code § 32-28-3-17", "citation": "Ind. Code § 32-28-3-17.", "url": "https://iga.in.gov/laws/2025/ic/titles/32", "proposition": "Indiana voids a provision in a contract for the improvement of Indiana real estate that subjects it to another state's law or requires out-of-state dispute resolution.", "verbatimQuote": "A provision in a contract for the improvement of real estate in Indiana is void if the provision: (1) makes the contract subject to the laws of another state; or (2) requires litigation, arbitration, or other dispute resolution process on the contract occur in another state.", "date": "2025-01-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-forum-void-construction" }, { "id": "fees-bad-faith", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Ind. Code § 34-52-1-1", "citation": "Ind. Code § 34-52-1-1(b).", "url": "https://iga.in.gov/laws/2025/ic/titles/34", "proposition": "Indiana courts may award attorney's fees to the prevailing party only where a claim or defense was frivolous, unreasonable, groundless, or litigated in bad faith.", "verbatimQuote": "In any civil action, the court may award attorney's fees as part of the cost to the prevailing party, if the court finds that either party: (1) brought the action or defense on a claim or defense that is frivolous, unreasonable, or groundless; (2) continued to litigate the action or defense after the party's claim or defense clearly became frivolous, unreasonable, or groundless; or (3) litigated the action in bad faith.", "date": "2025-01-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-fees-bad-faith" } ] }, { "slug": "extended-for-breach", "label": "Does an Indiana non-compete toll during breach?", "heading": "Does an Indiana non-compete toll or extend during breach or litigation?", "answerText": "This is an open Indiana question. No Indiana statute or precedential appellate decision squarely endorses automatically tolling or extending the restricted period while the former employee is in breach or while litigation is pending.", "sources": [ { "id": "q8-krueger-reasonableness", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Central Indiana Podiatry, P.C. v. Krueger", "citation": "Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).", "url": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/", "deepLink": "https://www.courtlistener.com/opinion/852486/central-indiana-podiatry-pc-v-krueger/#:~:text=The%20employer%20also%20bears%20the,activity%2C%20and%20geographic%20area%20restricted.", "proposition": "Krueger places the burden on the employer to prove reasonableness in scope, which applies to any clause that extends the restricted period.", "verbatimQuote": "The employer also bears the burden of establishing that the agreement is reasonable in scope as to the time, activity, and geographic area restricted.", "date": "2008-03-11", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-q8-krueger-reasonableness" }, { "id": "q8-heraeus-eraser", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Heraeus Medical, LLC v. Zimmer, Inc.", "citation": "Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).", "url": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/", "deepLink": "https://www.courtlistener.com/opinion/4683524/heraeus-medical-llc-v-zimmer-inc/#:~:text=The%20doctrine%2C%20however%2C%20does%20not,adding%2C%20changing%2C%20or%20rearranging%20terms.", "proposition": "Heraeus's eraser rule means a court cannot rewrite a covenant to add restricted time the contract did not clearly provide.", "verbatimQuote": "The doctrine, however, does not allow a court to rewrite a noncompetition agreement by adding, changing, or rearranging terms.", "date": "2019-12-03", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-q8-heraeus-eraser" } ] }, { "slug": "sale-of-business", "label": "Are sale-of-business covenants treated differently?", "heading": "Are non-competes tied to the sale of a business treated differently in Indiana?", "answerText": "Yes. A covenant ancillary to the sale of a business — or to an owner's sale of an equity interest — is judged under a more liberal standard than an ordinary employment covenant, because the buyer is paying for goodwill that the seller could otherwise destroy.", "sources": [ { "id": "dicen-sale-liberal", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Dicen v. New Sesco, Inc.", "citation": "Dicen v. New Sesco, Inc., 839 N.E.2d 684 (Ind. 2005).", "url": "https://www.courtlistener.com/opinion/852724/dicen-v-new-sesco-inc/", "deepLink": "https://www.courtlistener.com/opinion/852724/dicen-v-new-sesco-inc/#:~:text=We%20hold%20that%20such%20promises,contracts%20between%20employer%20and%20employee.", "proposition": "Dicen holds that sale-of-business non-competes are enforced on a more liberal basis than the skeptical standard used for employment covenants.", "verbatimQuote": "We hold that such promises not to compete should be enforced on a more liberal basis than the skeptical one courts use regarding contracts between employer and employee.", "date": "2005-12-21", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-dicen-sale-liberal" }, { "id": "zollinger-sale-standard", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Zollinger v. Wagner-Meinert Engineering, LLC", "citation": "Zollinger v. Wagner-Meinert Eng'g, LLC, 146 N.E.3d 1060 (Ind. Ct. App. 2020).", "url": "https://www.courtlistener.com/opinion/4747784/wayne-doug-zollinger-v-wagner-meinert-engineering-llc/", "deepLink": "https://www.courtlistener.com/opinion/4747784/wayne-doug-zollinger-v-wagner-meinert-engineering-llc/#:~:text=Covenants%20in%20typical%20employment%20contracts,to%20a%20more%20liberal%20standard.", "proposition": "Zollinger applies a more liberal standard to covenants ancillary to the sale of a business than the skeptical standard used for employment covenants.", "verbatimQuote": "Covenants in typical employment contracts are reviewed under a \"skeptical\" standard, while covenants that arise ancillary to the sale of a business are subject to a more liberal standard.", "date": "2020-04-23", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-zollinger-sale-standard" }, { "id": "etproducts-goodwill", "authorityType": "case-law", "tier": "primary-source-backed", "title": "E.T. Products, LLC v. D.E. Miller Holdings, Inc.", "citation": "E.T. Products, LLC v. D.E. Miller Holdings, Inc., 872 F.3d 464 (7th Cir. 2017).", "url": "https://www.courtlistener.com/opinion/4427509/et-products-llc-v-de-miller-holdings-inc/", "deepLink": "https://www.courtlistener.com/opinion/4427509/et-products-llc-v-de-miller-holdings-inc/#:~:text=Indiana%20courts%20recognize%20that%20in,receives%20that%20which%20he%20purchased.%22", "proposition": "E.T. Products, applying Indiana law, recognizes that a broad business-sale non-compete may be necessary to protect the goodwill the buyer purchased.", "verbatimQuote": "Indiana courts recognize that in a business sale, \"a broad noncompetition agreement may be necessary to assure that the buyer receives that which he purchased.\"", "date": "2017-09-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-etproducts-goodwill" } ] }, { "slug": "physicians", "label": "What special rules apply to physician non-competes?", "heading": "What special non-compete rules apply to Indiana physicians?", "answerText": "Indiana regulates physician non-competes by statute in three layers, each keyed to when the agreement was entered. For agreements entered on or after July 1, 2020, an enforceable physician covenant must include specified provisions, including a buyout option at a reasonable price; primary care physician non-competes entered on or after July 1, 2023 are banned outright; and physician-hospital non-competes entered on or after July 1, 2025 are void.", "sources": [ { "id": "hea1004-requirements", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "House Enrolled Act 1004 (2020), Ind. Code § 25-22.5-5.5-2", "citation": "Ind. Code § 25-22.5-5.5-2 (House Enrolled Act 1004, P.L. 93-2020).", "url": "https://iga.in.gov/pdf-documents/121/2020/house/bills/HB1004/HB1004.05.ENRS.pdf", "proposition": "House Enrolled Act 1004 (2020) requires a physician noncompete to include specified provisions to be enforceable.", "verbatimQuote": "To be enforceable, a physician noncompete agreement must include all of the following provisions:", "date": "2020-07-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-hea1004-requirements" }, { "id": "sea7-buyout", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Senate Enrolled Act 7 (2023), Ind. Code § 25-22.5-5.5-2", "citation": "Ind. Code § 25-22.5-5.5-2(a)(4) (Senate Enrolled Act 7, P.L. 165-2023).", "url": "https://iga.in.gov/pdf-documents/123/2023/senate/bills/SB0007/SB0007.05.ENRH.pdf", "proposition": "Senate Enrolled Act 7 requires that an enforceable physician noncompete give the physician an option to buy a complete release at a reasonable price.", "verbatimQuote": "(4) A provision that provides the physician whose employment has terminated or whose contract has expired with the option to purchase a complete and final release from the terms of the enforceable physician noncompete agreement at a reasonable price.", "date": "2023-07-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-sea7-buyout" }, { "id": "sea7-primary-care-ban", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Senate Enrolled Act 7 (2023), Ind. Code § 25-22.5-5.5-2.5", "citation": "Ind. Code § 25-22.5-5.5-2.5(b) (Senate Enrolled Act 7, P.L. 165-2023).", "url": "https://iga.in.gov/pdf-documents/123/2023/senate/bills/SB0007/SB0007.05.ENRH.pdf", "proposition": "Senate Enrolled Act 7 bars a primary care physician and an employer from entering into a noncompete agreement.", "verbatimQuote": "Notwithstanding any other law, a primary care physician and an employer may not enter into a noncompete agreement.", "date": "2023-07-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-sea7-primary-care-ban" }, { "id": "sea7-without-cause", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Senate Enrolled Act 7 (2023), Ind. Code § 25-22.5-5.5-2", "citation": "Ind. Code § 25-22.5-5.5-2(b)(1) (Senate Enrolled Act 7, P.L. 165-2023).", "url": "https://iga.in.gov/pdf-documents/123/2023/senate/bills/SB0007/SB0007.05.ENRH.pdf", "proposition": "Senate Enrolled Act 7 makes a physician noncompete unenforceable when the employer terminates the physician without cause.", "verbatimQuote": "The employer terminates the physician's employment without cause.", "date": "2023-07-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-sea7-without-cause" }, { "id": "sea475-hospital-ban", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Senate Enrolled Act 475 (2025), Ind. Code § 25-22.5-5.5-2.3", "citation": "Ind. Code § 25-22.5-5.5-2.3(c) (Senate Enrolled Act 475, P.L. 207-2025).", "url": "https://iga.in.gov/pdf-documents/124/2025/senate/bills/SB0475/SB0475.04.ENRH.pdf", "proposition": "Senate Enrolled Act 475 makes a physician-hospital noncompete entered on or after July 1, 2025 void and unenforceable.", "verbatimQuote": "Any agreement in violation of this section is void and unenforceable.", "date": "2025-07-01", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-sea475-hospital-ban" } ] }, { "slug": "other-workers", "label": "Do low-wage or other workers have special limits?", "heading": "Do low-wage or hourly Indiana workers have a special non-compete exemption?", "answerText": "No. Indiana has not enacted any wage-threshold or hourly-worker exemption. Outside the physician statutes, every employee — regardless of income — is governed by the common-law reasonableness and protectable-interest analysis.", "sources": [ { "id": "q11-dicen-common-law", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Dicen v. New Sesco, Inc.", "citation": "Dicen v. New Sesco, Inc., 839 N.E.2d 684 (Ind. 2005).", "url": "https://www.courtlistener.com/opinion/852724/dicen-v-new-sesco-inc/", "deepLink": "https://www.courtlistener.com/opinion/852724/dicen-v-new-sesco-inc/#:~:text=Covenants%20not%20to%20compete%20are,not%20favored%20in%20the%20law.", "proposition": "Dicen confirms that, absent a statutory exemption, Indiana non-competes are governed by the disfavored-restraint common-law framework that applies to ordinary workers.", "verbatimQuote": "Covenants not to compete are not favored in the law.", "date": "2005-12-21", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-q11-dicen-common-law" } ] }, { "slug": "federal-ftc-overlay", "label": "Did the FTC rule change Indiana law?", "heading": "Did the FTC's federal non-compete rule change Indiana non-compete law?", "answerText": "No. The FTC's 2024 nationwide Non-Compete Rule was set aside by a federal court before it took effect, so Indiana non-competes remain governed by Indiana common law and the physician statutes.", "sources": [ { "id": "ryan-ftc-set-aside", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Ryan LLC v. Federal Trade Commission", "citation": "Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).", "url": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/", "deepLink": "https://www.courtlistener.com/opinion/10205745/ryan-llc-v-federal-trade-commission/#:~:text=The%20Non%2DCompete%20Rule%2C%2016%20C.F.R.,September%204%2C%202024%2C%20or%20thereafter.", "proposition": "Ryan set aside the FTC Non-Compete Rule with nationwide effect so that it would not be enforced or take effect.", "verbatimQuote": "The Non-Compete Rule, 16 C.F.R. § 910.1–.6, is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter.", "date": "2024-08-20", "anchor": "https://openagreements.org/practice-guides/non-compete/us/indiana#src-ryan-ftc-set-aside" } ] } ] } }