Indiana Non-Compete Laws (2026): Are Non-Competes Enforceable?

Indiana has no general non-compete statute. Its courts enforce an employee non-compete only if it is reasonable in time, scope of activity and geography and protects a legitimate interest of the employer, and they treat these covenants as restraints of trade that the law disfavors, under the Indiana Supreme Court's decision in Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).

Physicians are the exception. Indiana Code chapter 25-22.5-5.5 bars non-competes between an employer and a primary care physician in agreements originally entered into on or after July 1, 2023, voids non-competes between a physician and a hospital or hospital system entered into on or after July 1, 2025, and sets conditions every other covered physician non-compete must meet. For how other states compare, see our non-compete laws by state guide.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Indiana's common-law rule on employee covenants not to compete (Central Indiana Podiatry v. Krueger, 2008, and Clark's Sales and Service v. Smith, 2014), the physician non-compete statute in Indiana Code chapter 25-22.5-5.5, and recent Indiana bills, with a short note on the federal FTC rule. It does not cover trade-secret claims (see Indiana trade secret laws) or severance agreements (see Indiana severance pay laws).

Are non-competes enforceable in Indiana?

For most workers, they can be if they are reasonable, but Indiana courts start from skepticism. In Krueger, the Indiana Supreme Court said that "noncompetition covenants in employment contracts are in restraint of trade and disfavored by the law." A covenant must be reasonable in three respects:

Krueger itself shows how this works. The parties accepted that a two-year term was reasonable, and the court limited the covenant's territory to the area in which the physician had developed patient relationships using the practice group's resources. The court held that non-competes between a physician and a practice group are not void as against public policy as a category and are enforceable to the extent they are reasonable.

Indiana has no statute setting a maximum length or territory for ordinary employee non-competes, and no salary or income threshold.

Signing a non-compete after you start the job

In Clark's Sales and Service, Inc. v. Smith, 4 N.E.3d 772 (Ind. Ct. App. 2014), decided February 20, 2014, the Court of Appeals recounted that an earlier panel of the court, in a March 8, 2013 memorandum decision in the same dispute, had held that a promise of continued at-will employment was adequate consideration for the covenant. That earlier memorandum decision is reported here as the 2014 opinion describes it.

Outside the physician statute, our research found no Indiana rule requiring advance notice before signing, advice to consult a lawyer, or garden-leave pay.

What an Indiana court does with an overbroad non-compete

Indiana uses a strict blue-pencil rule. A court may strike an unreasonable term that can be separated from the rest, but it will not rewrite the covenant or add new terms. As Krueger puts it, "The blue pencil doctrine permits excising language but not rewriting the agreement."

Clark's Sales shows the consequence. The Court of Appeals affirmed the denial of a preliminary injunction because the overbroad customer and geographic restrictions were written as an indivisible whole. Rewriting them, the court said, "would subject the parties to an agreement that they did not make," so the restrictions could not be saved.

Fired, laid off or quit

Outside the physician statute, our research found no Indiana rule that a covenant falls away because the employer fired or laid off the worker. Krueger states that a breach by the employer may prevent enforcement of a non-compete. The court also noted that contract clauses saying the employee's claims against the employer are no defense to the covenant ("no-defense" provisions) have been upheld even where the employer's breach appeared major, and it held that Krueger's complaint about an unpaid car allowance was not enough to stop enforcement. Check whether your agreement contains such a clause.

For physicians, the statute answers the question directly; see the section on termination below. For Indiana's general rule on ending employment, see Indiana at-will employment laws.

Indiana physician non-compete law

Indiana Code chapter 25-22.5-5.5 is the state's only non-compete statute our research identified. It applies to physician non-compete agreements originally entered into on or after July 1, 2020 (§ 25-22.5-5.5-1), and later amendments layered on stricter rules. The section text below is quoted from the 2026 Indiana Code; the 2025 hospital provisions also match the enrolled act signed that year.

Which rule applies depends on the kind of physician, the kind of employer, and the date the agreement was originally entered into:

Primary care physicians

Section 25-22.5-5.5-2.5(b) provides: "Notwithstanding any other law, a primary care physician and an employer may not enter into a noncompete agreement." The section "does not apply to a physician noncompete agreement originally entered into before July 1, 2023." Section 25-22.5-5.5-1.5 defines primary care to cover family medicine, general pediatric medicine and internal medicine.

Physicians employed by hospitals and hospital systems (since July 1, 2025)

Senate Enrolled Act 475 (2025) added § 25-22.5-5.5-2.3. The legislature's bill page records the governor's signature and Public Law 207 (May 6, 2025), and the enrolled text marks these sections effective July 1, 2025. Section 2.3 reads in part:

"(b) Notwithstanding any other law, a physician and: (1) a hospital; (2) a parent company of a hospital; (3) an affiliated manager of a hospital; or (4) a hospital system; may not enter into a noncompete agreement on or after July 1, 2025. (c) Any agreement in violation of this section is void and unenforceable." Ind. Code § 25-22.5-5.5-2.3

The same act sets the scope of that ban:

• Date that counts. "Originally entered into" means the first date of the agreement; an amendment or renewal does not reset it (§ 25-22.5-5.5-1.6). An agreement first signed before July 1, 2025 is not voided by § 2.3.
• Clauses that count as a non-compete. The § 1.4 definition reaches more than a classic covenant, including clauses requiring a physician employed three years or more to repay bonuses or training costs because of moving to a new employer, requirements for the employer's consent or equitable relief, and indirect restraints.
• Clauses that do not count. Section 1.4(b) excludes nondisclosure agreements protecting confidential information or trade secrets; non-solicitation of employees lasting no more than one year after employment ends, which may not restrict patient interactions, referrals, clinical collaboration or professional relationships; and agreements made in a bona fide sale of a business entity when the physician owns more than 50 percent at the sale.
• Practice of medicine. For this purpose, the practice of medicine excludes purely executive or managerial activity with no direct patient care (§ 1.7).

The 2025 ban reaches only hospitals, hospital parent companies, affiliated managers of hospitals and hospital systems. It does not reach physician practices or other employers that are not in those categories.

Conditions for other physician non-competes

For a covered physician non-compete that is not banned outright, § 25-22.5-5.5-2(a) says that "to be enforceable, a physician noncompete agreement must include" five provisions. They cover notice to patients, the physician's contact information, patients' access to medical records, an option for the physician to purchase a release from the non-compete, and the format of the records.

Section 2.6 governs the release purchase. The employer must negotiate the release price in good faith. Either side may serve notice of intent to mediate within 35 days of the physician's election, mediation must conclude within 45 days of that notice, and the parties split the mediator's fee and direct costs equally. Section 3 allows a reasonable fee for copying or transferring records, and § 4 says the chapter does not limit other negotiated terms or other remedies at law or in equity.

When a physician non-compete ends with the job

Section 25-22.5-5.5-2(b) provides that, beginning July 1, 2023, a physician non-compete agreement is not enforceable if any of these occur:

1. The employer terminates the physician's employment without cause.
2. The physician terminates the physician's employment for cause.
3. The physician's employment contract has expired and the physician and employer have fulfilled the obligations of the contract.

The physician chapter names no state agency to enforce it, and the text read contains no fee-shifting, damages or employee-notice provision. Disputes go to court, or, for the release price, to mediation under § 2.6.

Other health workers and professions

The physician chapter covers physicians only. Our research did not find a separate Indiana non-compete statute for nurses, nurse practitioners, other health care workers or lawyers, but that search was not exhaustive, so this page states no rule for them.

Non-solicits, confidentiality agreements and trade secrets

Outside the physician chapter, customer restrictions are judged by the same reasonableness analysis; in Clark's Sales, the court would not save overbroad customer-restriction language. Trade-secret protection is a separate body of law that does not depend on a non-compete; see Indiana trade secret laws.

Recent and failed Indiana non-compete bills

The code's history lines show §§ 1.5, 2.5 and 2.6 were added, and § 2 amended, by Public Law 165-2023; the July 1, 2023 dates in §§ 2(b), 2.5 and 2.6 mark when those physician rules took effect. Bills prefiled for the 2027 session were not checked.

The FTC rule and Indiana non-competes

The FTC's nationwide non-compete ban is not in force. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.); the FTC voted on September 5, 2025 to dismiss its appeals and removed the rule from the Code of Federal Regulations on February 12, 2026. The FTC still brings case-by-case actions, including a final order approved June 22, 2026 requiring a pest-control company to stop enforcing non-competes. More: FTC non-compete ban struck down.

What this page does not answer

Our research did not verify Indiana rules on these points, so this page states none:

• whether an Indiana court will honor an out-of-state choice-of-law or forum clause (the physician bans apply "notwithstanding any other law," but no Indiana court decision on choice of law was reviewed);
• non-compete rules for lawyers under the Indiana Rules of Professional Conduct;
• non-compete rules for nurses and other non-physician health workers;
• whether being fired without cause affects a non-physician's covenant, beyond the prior-breach principle in Krueger.

If you have been asked to sign

For most Indiana workers, the questions are whether the time, activity and territory limits are reasonable and whether any overbroad part can be cleanly struck, since Indiana courts will not rewrite a covenant. Physicians should first check the date the agreement was originally entered into and whether the employer is a hospital or hospital system. A lawyer licensed in Indiana can review a specific agreement.

Related

• Non-compete laws by state
• Indiana trade secret laws
• Indiana severance pay laws
• Indiana at-will employment laws

Disclaimer: This article provides general legal information about Indiana non-compete law under Central Indiana Podiatry v. Krueger (2008) and Indiana Code chapter 25-22.5-5.5, not legal advice. The information was last verified on 2026-10-08. Indiana non-compete disputes are decided by the courts; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Indiana.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Indiana?

They can be if reasonable. Under Central Indiana Podiatry v. Krueger (Ind. 2008), covenants are disfavored and must be reasonable in time, scope of activity and geography; physicians have separate statutory rules in Ind. Code chapter 25-22.5-5.5.

Will an Indiana court rewrite an overbroad non-compete?

No. Indiana courts may strike divisible unreasonable language under the blue pencil doctrine but will not rewrite the agreement (Krueger, 2008; Clark's Sales, 2014).

Did Indiana ban non-competes for doctors?

Partly. Primary care physicians may not enter non-competes originally entered into on or after July 1, 2023 (§ 25-22.5-5.5-2.5), and hospital and hospital-system physician non-competes are void if entered into on or after July 1, 2025 (§ 2.3).

Does the Indiana hospital non-compete ban apply to my old contract?

Section 25-22.5-5.5-2.3 does not apply to agreements originally entered into before July 1, 2025, and § 1.6 says an amendment or renewal does not change the original date.

Is a physician non-compete enforceable in Indiana if I was fired?

Under § 25-22.5-5.5-2(b), beginning July 1, 2023, a physician non-compete is not enforceable if the employer terminates the physician without cause.

Is there a salary threshold for Indiana non-competes?

No. SB 132 (2026) proposed a $150,000 threshold but was marked inactive after its referral to committee in January 2026.

Does continued employment support an Indiana non-compete?

The 2014 Clark's Sales opinion reports that an earlier 2013 Court of Appeals memorandum decision held a promise of continued at-will employment adequate consideration.

Does the FTC non-compete ban apply in Indiana?

No. A federal court set it aside on August 20, 2024, and the FTC removed it from the Code of Federal Regulations on February 12, 2026.