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

Iowa has no general non-compete statute. Its courts enforce an employee non-compete if it is reasonably necessary to protect the employer's business, does not unreasonably restrict the employee's rights, and is not prejudicial to the public interest, the test the Iowa Supreme Court applied in Iowa Glass Depot, Inc. v. Jindrich, 338 N.W.2d 376 (Iowa 1983).

A handful of statutes carve out specific health care workers. Iowa Code § 147.161 voids location, former-client and time restrictions on licensed mental health professionals; Iowa Code chapter 135Q bars non-compete clauses in health care staffing agency and nursing-platform contracts; and a 2026 law directs the Board of Regents to bar non-compete clauses in University of Iowa Hospitals and Clinics contracts with physicians, nurses and certain other clinicians. 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 Iowa's common-law rule on employee covenants not to compete (Iowa Glass Depot v. Jindrich, 1983, and Lamp v. American Prosthetics, 1986), the profession-specific statutes in Iowa Code §§ 147.161, 135Q.2, 135Q.3 and 262.9(43), with a short note on the federal FTC rule. It does not cover trade-secret claims (see Iowa trade secret laws) or severance agreements (see Iowa severance pay laws).

Are non-competes enforceable in Iowa?

For most workers, yes, if a court finds the covenant reasonable. Iowa courts weigh three questions, as framed in Lamp v. American Prosthetics, Inc., 379 N.W.2d 909 (Iowa 1986):

Lamp shows how territory is judged. A covenant barring work within 100 miles of any of the employer's offices covered virtually the whole state, and the court found it too broad.

Our research found no Iowa statute setting a salary threshold, a maximum length or a maximum territory for ordinary employee non-competes. That search was not exhaustive.

Signing after you start the job, and the balance of hardship

In Iowa Glass Depot, the Iowa Supreme Court held that continued employment for an indefinite period is sufficient consideration for a covenant signed during employment, following earlier Iowa decisions.

The same case shows that adequate consideration does not end the analysis. The court still refused to enforce the covenant. It found enforcement not reasonably necessary to protect the employer, which gave little specialized training and had no trade secrets or exclusive customer lists at stake, and unreasonably restrictive of the employee. It added that he received no raise or other benefit for signing, so his gain was grossly disproportionate to the injury enforcement would cause him, and the employer's potential gain did not outweigh that injury.

What an Iowa court does with an overbroad non-compete

Iowa allows partial enforcement, but does not require it. Lamp explains that Iowa law permits a court to modify an overbroad covenant and enforce it to a reasonable extent, but a court need not do so on its own initiative. In Lamp, partial enforcement was not raised in the district court and was not ordered, so the overbroad covenant was not enforced.

Fired or quit

Our research found no Iowa statute or settled rule that a non-compete falls away when the employer fires or lays off the worker. The employee in Lamp had been discharged, and the court analyzed the covenant under the same three-part test. For Iowa's general rule on ending employment, see Iowa at-will employment laws.

Licensed mental health professionals

Iowa Code § 147.161 goes beyond a typical non-compete ban. It reads:

"An employer shall not enter into an agreement with a licensed mental health professional that limits the location at which the licensee may practice, prohibits the licensee from contacting for professional services a person previously treated by the licensee, or imposes a time restriction on the practice of the licensee. ... A provision of an agreement entered into between an employer and a licensed mental health professional prior to, on, or after June 1, 2023, that is contrary to this section shall be void and unenforceable." Iowa Code § 147.161

Two points stand out. The section reaches location limits, bans on contacting former clients, and time restrictions, not only clauses labeled "non-compete." And it voids conflicting provisions in agreements made before June 1, 2023, as well as later ones.

"Mental health professional" uses the definition in Iowa Code § 228.1, plus individuals completing supervision under a temporary license and licensed master social workers with an active supervision plan on file with the board of behavioral health professionals. "Employer" means a person who employs a worker for wages in Iowa. The code's history line shows the section was created by 2023 Acts, chapter 120, and amended in 2024.

Health care staffing agencies and nursing platforms

Iowa Code § 135Q.2(3) limits health care employment agencies:

"A health care employment agency shall not do any of the following: (1) Restrict in any manner the employment opportunities of an agency worker by including a noncompete clause in any contract with an agency worker or health care entity. (2) In any contract with an agency worker or health care entity, require payment of liquidated damages, employment fees, or other compensation if the agency worker is subsequently hired as a permanent employee of the health care entity." Iowa Code § 135Q.2(3)

The ban does not apply to a contract that meets all three conditions in § 135Q.2(3)(b): it places an agency worker the agency helped obtain authorization to work in the United States, it has an initial term of at least 24 months and a total term, with renewals or extensions, of no more than 36 months, and it requires the worker to work for a single health care entity for the whole contract.

Iowa Code § 135Q.3(3) applies a parallel rule to health care technology platforms. In the code text retrieved July 29, 2026, a platform may not "restrict in any manner the employment opportunities of an independent nursing services professional by including a noncompete clause in any contract with an independent nursing services professional or health care entity," and "any contract that violates this subsection shall be unenforceable in court."

The Iowa Department of Inspections, Appeals, and Licensing, which oversees chapter 135Q, must operate a public complaint system for agencies and platforms (§§ 135Q.1(2), 135Q.2(5), 135Q.3(4)).

University of Iowa Hospitals and Clinics clinicians (2026)

House File 2254, enacted as 2026 Acts chapter 1173 and signed by the governor on June 2, 2026, added Iowa Code § 262.9(43). It directs the Board of Regents to:

"Develop a policy that prohibits the university of Iowa hospitals and clinics from including a noncompete clause in an employment contract with an advanced registered nurse practitioner, a licensed practical nurse, a pharmacist, a physician, a physician assistant, or a registered nurse." Iowa Code § 262.9(43)

The act defines a noncompete clause as a restriction on the right to practice in any geographic area or for a defined period after the contract ends. It took effect on enactment and applies to contracts entered into, extended or renewed on or after its effective date.

This law reaches only University of Iowa Hospitals and Clinics, not other Iowa hospitals, and it places the duty on the Board of Regents rather than giving workers a direct right. Our research did not confirm whether the Regents have adopted the required policy.

Physicians and other workers outside these statutes

Our research found no Iowa statute covering physicians at private employers, lawyers or other workers not named in these statutes, though that search was not exhaustive; for them, this page describes only the common-law test above. Our research did not check the professional-conduct rule on lawyer non-competes.

Non-competes and trade secrets

A non-compete is a contract term; trade-secret protection is a separate body of law that applies whether or not a worker signed one. See Iowa trade secret laws.

Recent changes to Iowa non-compete law

Beyond HF 2254, Senate File 380 (2025) proposed limits on non-compete covenants for nurses; it was referred to the Workforce Committee and a subcommittee in February 2025 and advanced no further. Our search was not a full review of the bill list, and bills for the 2027 session were not checked.

The FTC rule and Iowa non-competes

The FTC's nationwide ban on non-competes never took effect. 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, though it continues to act against individual employers, as in a final order approved June 22, 2026 requiring a pest-control company to stop enforcing non-competes. See FTC non-compete ban struck down.

What this page does not answer

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

• whether an Iowa court will honor an out-of-state choice-of-law or forum clause;
• separate rules for customer non-solicitation and confidentiality agreements;
• whether a layoff or firing without cause changes the analysis, beyond the Lamp example.

If you have been asked to sign

For most Iowa workers, the questions are whether the restriction is reasonably necessary to protect the employer's business, how much it limits your ability to work, whether it harms the public, and what you received for signing. Mental health professionals, staffing-agency and platform nurses, and UIHC clinicians should check the specific statutes above first. A lawyer licensed in Iowa can review a specific agreement.

Related

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

Disclaimer: This article provides general legal information about Iowa non-compete law under Iowa Glass Depot v. Jindrich (1983) and Iowa Code §§ 147.161, 135Q.2, 135Q.3 and 262.9(43), not legal advice. The information was last verified on 2026-10-08. Iowa non-compete disputes are decided by the courts; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Iowa.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Iowa?

They can be. Under Iowa Glass Depot v. Jindrich (1983), a covenant is enforced if reasonably necessary to protect the employer's business, not unreasonably restrictive of the employee's rights, and not prejudicial to the public interest.

Will an Iowa court rewrite an overbroad non-compete?

It may. Lamp v. American Prosthetics explains that Iowa courts can modify an overbroad covenant and enforce it partially, but are not required to do so on their own initiative.

Is continued employment enough for an Iowa non-compete?

Iowa Glass Depot (1983) held continued employment for an indefinite period is sufficient consideration, though the court still refused enforcement, finding the covenant not reasonably necessary to protect the employer and unreasonably restrictive of an employee who got no benefit for signing.

Can a therapist or counselor in Iowa be bound by a non-compete?

Iowa Code § 147.161 bars employers from agreements limiting where a licensed mental health professional may practice, barring contact with former clients, or imposing time restrictions, and voids such provisions whenever made.

Did Iowa ban non-competes for nurses?

Only in specific settings: staffing agencies and nursing platforms may not use non-compete clauses (Iowa Code §§ 135Q.2(3), 135Q.3(3)), and § 262.9(43) requires a Regents policy barring them at University of Iowa Hospitals and Clinics.

Does the 2026 Iowa law ban non-competes at all hospitals?

No. Iowa Code § 262.9(43), from HF 2254 signed June 2, 2026, applies only to University of Iowa Hospitals and Clinics, for contracts entered into, extended or renewed on or after its effective date.

Is there a salary threshold for Iowa non-competes?

Our research found no Iowa statute setting one; outside the health care statutes, the common-law reasonableness test applies.

Does the FTC non-compete ban apply in Iowa?

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