Are employee non-compete agreements enforceable in Indiana?
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.
There is no general Indiana statute governing non-competes for most employees; the enforceability analysis is judge-made. The Indiana Supreme Court has long treated these covenants as disfavored and read them narrowly, placing the burden on the employer to justify every restriction . The one large statutory exception — a layered set of restrictions on physician covenants — is covered later in this note.
Do not assume an Indiana covenant is enforceable just because the employee signed it. The employer carries the burden, courts construe the restraint strictly against the drafter, and an unreasonable restriction will not be enforced.
Sources for this answer
Case law · 2008-03-11
A.1 Central Indiana Podiatry, P.C. v. KruegerKrueger states that Indiana courts construe non-compete covenants strictly against the employer and will not enforce an unreasonable restriction.
We construe these covenants strictly against the employer and will not enforce an unreasonable restriction.
See Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).
Case law · 2005-12-21
A.2 Dicen v. New Sesco, Inc.Dicen confirms that covenants not to compete are disfavored in Indiana law.
Covenants not to compete are not favored in the law.
See Dicen v. New Sesco, Inc., 839 N.E.2d 684 (Ind. 2005).
What legitimate business interests can support an Indiana non-compete?
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.
A covenant cannot exist only to insulate the employer from ordinary competition. An employee's general skills and routine industry knowledge are not protectable, so a restraint that simply keeps a former worker out of the market is void as against public policy. The protectable interest must be something the employer is entitled to guard — typically goodwill, customer relationships, or confidential information .
Indiana's Uniform Trade Secrets Act supplies a statutory overlay that runs alongside any covenant. It defines a trade secret by the twin tests of independent economic value from secrecy and reasonable efforts to keep it secret, and it displaces conflicting common law except contract law — so trade-secret remedies coexist with a contractual restraint or NDA rather than replacing it . A confidentiality and trade-secret strategy is often the more durable protection, especially where a non-compete is unenforceable or, for hospital-employed physicians, statutorily void.
Do not draft an Indiana non-compete around a general wish to avoid competition. Identify the specific goodwill, customer relationship, or confidential information at stake, because the employer must prove a legitimate protectable interest before a court will even reach the reasonableness of time, activity, or geography.
Sources for this answer
Case law · 2008-03-11
B.1 Central Indiana Podiatry, P.C. v. KruegerKrueger requires the employer to first show a legitimate protectable interest before a non-compete will be tested for reasonableness.
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.
See Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).
Primary law · 2025-01-01
B.2 Indiana Uniform Trade Secrets Act, Ind. Code § 24-2-3The Indiana Uniform Trade Secrets Act defines a trade secret by independent economic value from secrecy plus reasonable efforts to maintain secrecy.
"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.
See Ind. Code § 24-2-3-2.
Is continued at-will employment enough consideration for an Indiana non-compete?
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.
The Indiana Court of Appeals settled this point in Med-1 Solutions, LLC v. Taylor (2024), confirming a longstanding rule: continued employment of an at-will worker supplies the consideration needed for a mid-employment restrictive covenant. No separate bonus, raise, or promotion is required . This is a meaningful contrast with neighboring states that require new, independent consideration when an incumbent signs.
Even so, consideration is only the threshold. In Med-1 Solutions itself the court still affirmed the denial of an injunction because the employer could not show the restraint was reasonable — so a covenant supported by continued employment can still fail on overbreadth.
Sources for this answer
Case law · 2024-11-25
C.1 Med-1 Solutions, LLC v. TaylorMed-1 Solutions holds that continued at-will employment is sufficient consideration for a non-compete an employee is required to sign during employment.
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.
See Med-1 Solutions, LLC v. Taylor, No. 24A-PL-450 (Ind. Ct. App. Nov. 25, 2024).
What duration, geography, and activity scope are reasonable for an Indiana non-compete?
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.
Indiana courts evaluate the three dimensions together against the employer's real footprint and the employee's actual role. Duration should match the time needed to protect the interest; geography should track where the employer does business or where the employee held influence; and the restricted activity must relate to the work the employee actually performed .
The activity dimension is where covenants most often fail. In Med-1 Solutions, a clause that would have barred the employee from working for a competitor in any capacity — including roles unrelated to any protectable interest — was held unreasonably broad .
Do not bar a former employee from a competitor in any capacity or across business lines they never touched. Tie the restricted activity to the employee's actual role and the protected interest, because an Indiana court placed the burden on the employer and found exactly that kind of all-capacity restraint unreasonably broad.
Sources for this answer
Case law · 2008-03-11
D.1 Central Indiana Podiatry, P.C. v. KruegerKrueger places the burden on the employer to establish that the covenant is reasonable in time, activity, and geographic scope.
The employer also bears the burden of establishing that the agreement is reasonable in scope as to the time, activity, and geographic area restricted.
See Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).
Case law · 2024-11-25
D.2 Med-1 Solutions, LLC v. TaylorMed-1 Solutions found that a covenant barring work for a competitor in any capacity restricted an unreasonably broad scope of activity.
We find that the scope of activity restricted by the covenant is unreasonably broad.
See Med-1 Solutions, LLC v. Taylor, No. 24A-PL-450 (Ind. Ct. App. Nov. 25, 2024).
Will an Indiana court blue-pencil or reform an overbroad non-compete?
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.
The Indiana Supreme Court reaffirmed this in Heraeus Medical, LLC v. Zimmer, Inc. (2019). A court may excise offending words from a divisible covenant, but it may not rewrite the agreement, and a contractual reformation or modification clause does not expand that power . The blue pencil is available only where the covenant is clearly divisible and a reasonable restriction survives after the unreasonable parts are removed .
That divisibility requirement is decisive. In Clark's Sales and Service, Inc. v. Smith, an overbroad restriction that was written as an interconnected whole could not be saved, because there was no severable language a court could strike to leave a reasonable covenant behind .
Do not rely on a reformation or savings clause to rescue an aggressive Indiana covenant — it is a dead letter. Draft narrow, severable restrictions from the start, because an Indiana court will only erase divisible offending language and will void an indivisible overbroad covenant entirely.
Sources for this answer
Case law · 2019-12-03
E.1 Heraeus Medical, LLC v. Zimmer, Inc.Heraeus holds that the blue-pencil doctrine does not allow a court to rewrite a non-compete by adding, changing, or rearranging terms.
The doctrine, however, does not allow a court to rewrite a noncompetition agreement by adding, changing, or rearranging terms.
See Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).
Case law · 2019-12-03
E.2 Heraeus Medical, LLC v. Zimmer, Inc.Heraeus holds that courts cannot add terms to an unenforceable covenant even when the agreement purports to authorize the court to do so.
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.
See Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).
Case law · 2019-12-03
E.3 Heraeus Medical, LLC v. Zimmer, Inc.Heraeus limits blue-penciling to covenants that are clearly divisible and that leave a reasonable restriction after the unreasonable parts are removed.
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.
See Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).
Case law · 2014-02-20
E.4 Clark's Sales and Service, Inc. v. SmithClark's Sales holds that an indivisible, unreasonable covenant cannot be blue-penciled and the doctrine is inapplicable.
Paragraph 7(C) is indivisible and unreasonable as a whole, and the blue pencil doctrine is inapplicable.
See Clark's Sales and Service, Inc. v. Smith, 4 N.E.3d 772 (Ind. Ct. App. 2014).
Are customer non-solicitation and employee no-hire clauses enforceable in Indiana?
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.
In Heraeus, an employee non-solicitation covenant failed because it reached every company employee, not just those tied to a protectable interest . The same reasonableness analysis governs customer non-solicitation. Because any restraint must be tied to a legitimate protectable interest, a customer restriction is on firmer ground when limited to customers the employee actually served or about whom the employee held confidential information, and weaker when it sweeps in all customers regardless of contact .
Do not draft a no-hire clause that covers any or all employees of the company. Limit it to workers who hold confidential information or specialized value, because Indiana voided a blanket employee non-solicitation covenant as overbroad and the eraser rule will not rewrite it for you.
Sources for this answer
Case law · 2019-12-03
F.1 Heraeus Medical, LLC v. Zimmer, Inc.Heraeus holds that an employee non-solicitation covenant reaching all of the company's employees is overbroad.
As written, the Kolbe Agreement's employee nonsolicitation covenant is overbroad because it applies to all Zimmer employees.
See Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).
Case law · 2008-03-11
F.2 Central Indiana Podiatry, P.C. v. KruegerKrueger's requirement of a legitimate protectable interest governs customer non-solicitation, which is defensible only when tied to customers connected to that interest.
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.
See Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).
Are liquidated-damages clauses in Indiana non-competes enforceable?
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.
In American Consulting, Inc. v. Hannum Wagle & Cline Engineering, Inc. (2019), the Indiana Supreme Court struck the liquidated-damages provisions at issue as penalties, finding them too broad to function as a reasonable estimate of damages . Because injunctive relief can be hard to obtain when a covenant's reasonableness is contested, employers often lean on liquidated damages — but an aggressive number that bears no relation to actual loss is itself a litigation risk.
Do not set a flat, oversized liquidated-damages figure as a non-compete enforcement substitute. Tie any stipulated sum to a reasonable estimate of anticipated loss, because Indiana struck liquidated-damages provisions that were grossly disproportionate and captured too much conduct as unenforceable penalties.
Sources for this answer
Case law · 2019-12-18
G.1 American Consulting, Inc. v. Hannum Wagle & Cline Engineering, Inc.American Consulting holds that liquidated damages grossly disproportionate to the loss are treated as an unenforceable penalty.
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.
See American Consulting, Inc. v. Hannum Wagle & Cline Eng'g, Inc., 136 N.E.3d 208 (Ind. 2019).
Case law · 2019-12-18
G.2 American Consulting, Inc. v. Hannum Wagle & Cline Engineering, Inc.American Consulting found the liquidated-damages provisions at issue to be unenforceable penalties.
In sum, we find that all of the liquidated damages provisions at issue are unenforceable penalties.
See American Consulting, Inc. v. Hannum Wagle & Cline Eng'g, Inc., 136 N.E.3d 208 (Ind. 2019).
Can an employer use a choice-of-law clause or fee-shifting to strengthen an Indiana covenant?
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.
Employers sometimes try to escape Indiana's strict eraser rule by routing disputes to a more covenant-friendly state through a choice-of-law or forum clause. That tactic has a statutory limit in the construction context: for a contract to improve Indiana real estate, a provision making the contract subject to another state's law — or requiring litigation, arbitration, or other dispute resolution to occur in another state — is void .
On costs, Indiana follows the American Rule. A court may shift attorney's fees to the prevailing party only when the opponent's claim or defense was frivolous, unreasonable, or groundless, or was litigated in bad faith . In practice, parties contract around the default with a prevailing-party fee clause, which Indiana courts routinely enforce.
Do not assume a foreign choice-of-law or forum clause will carry an Indiana covenant dispute. For a contract to improve Indiana real estate the clause is void by statute, and absent a contractual fee provision, attorney's fees are recoverable only for frivolous or bad-faith litigation.
Sources for this answer
Primary law · 2025-01-01
H.1 Ind. Code § 32-28-3-17Indiana 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.
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.
See Ind. Code § 32-28-3-17.
Primary law · 2025-01-01
H.2 Ind. Code § 34-52-1-1Indiana 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.
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.
See Ind. Code § 34-52-1-1(b).
Does an Indiana non-compete toll or extend during breach or litigation?
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.
Two features of Indiana law cut against assuming an extension will be enforced. First, any clause that lengthens the restricted period is still part of the covenant and must satisfy the same reasonableness test, with the burden on the employer; an automatic, open-ended extension risks being found unreasonable . Second, because Indiana courts may only erase divisible language and cannot rewrite a covenant, a court is unlikely to manufacture extra time that the contract did not clearly and reasonably provide .
A contractual extension-on-breach clause is therefore unsettled and fact-dependent in Indiana. It is most defensible when drafted as a separate, reasonable provision tied to the duration of an actual breach, rather than as an automatic or indefinite tolling of the clock.
Open question: Indiana law is unsettled on whether a tolling or extension-on-breach clause is enforceable after the original period expires. Draft any such clause narrowly and tie it to the actual breach, and do not assume an Indiana court will add time to an expired covenant, because the courts can only erase — not rewrite — covenant language.
Sources for this answer
Case law · 2008-03-11
I.1 Central Indiana Podiatry, P.C. v. KruegerKrueger places the burden on the employer to prove reasonableness in scope, which applies to any clause that extends the restricted period.
The employer also bears the burden of establishing that the agreement is reasonable in scope as to the time, activity, and geographic area restricted.
See Central Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008).
Case law · 2019-12-03
I.2 Heraeus Medical, LLC v. Zimmer, Inc.Heraeus's eraser rule means a court cannot rewrite a covenant to add restricted time the contract did not clearly provide.
The doctrine, however, does not allow a court to rewrite a noncompetition agreement by adding, changing, or rearranging terms.
See Heraeus Medical, LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).
Are non-competes tied to the sale of a business treated differently in Indiana?
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.
Indiana applies the skeptical, employer-disfavoring standard to employment covenants but a more lenient one to sale-ancillary restraints . The Indiana Supreme Court explained in Dicen that sale-of-business promises are enforced on a more liberal basis than employment covenants , and the Court of Appeals applied that lenient standard in Zollinger v. Wagner-Meinert Engineering, LLC to an owner who sold his interest. The reason is goodwill: the Seventh Circuit, applying Indiana law in E.T. Products, LLC v. D.E. Miller Holdings, Inc., upheld a broad sale covenant precisely to protect the goodwill the buyer purchased .
Do not analyze a sale-of-business or equity-sale covenant under the strict employment standard, in either direction. The seller faces a more liberal, buyer-favoring standard that tolerates broader restraints, so a covenant that would fail as an employment clause may well be enforced when it is ancillary to a sale.
Sources for this answer
Case law · 2005-12-21
J.1 Dicen v. New Sesco, Inc.Dicen holds that sale-of-business non-competes are enforced on a more liberal basis than the skeptical standard used for employment covenants.
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.
See Dicen v. New Sesco, Inc., 839 N.E.2d 684 (Ind. 2005).
Case law · 2020-04-23
J.2 Zollinger v. Wagner-Meinert Engineering, LLCZollinger applies a more liberal standard to covenants ancillary to the sale of a business than the skeptical standard used for employment covenants.
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.
See Zollinger v. Wagner-Meinert Eng'g, LLC, 146 N.E.3d 1060 (Ind. Ct. App. 2020).
Case law · 2017-09-20
J.3 E.T. Products, LLC v. D.E. Miller Holdings, Inc.E.T. Products, applying Indiana law, recognizes that a broad business-sale non-compete may be necessary to protect the goodwill the buyer purchased.
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."
See E.T. Products, LLC v. D.E. Miller Holdings, Inc., 872 F.3d 464 (7th Cir. 2017).
What special non-compete rules apply to Indiana physicians?
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.
The 2020 baseline (House Enrolled Act 1004) created Indiana Code chapter 25-22.5-5.5, which applies to physician noncompetes entered on or after July 1, 2020 and makes every such covenant conditional on mandatory contract terms . Among those terms, the physician must be given the option to purchase a complete and final release from the covenant at a reasonable price — a term the statute does not define, which has become a recurring point of dispute .
The 2023 amendments (Senate Enrolled Act 7) went further. They banned non-competes for primary care physicians entered on or after July 1, 2023 , and made other physician covenants within the chapter unenforceable when, for example, the employer terminates the physician without cause .
The 2025 amendment (Senate Enrolled Act 475) is the most sweeping. Effective July 1, 2025, a physician and a hospital, a parent company of a hospital, an affiliated manager of a hospital, or a hospital system may not enter a non-compete, and any agreement that violates the ban is void and unenforceable . The ban reaches new agreements only — it does not invalidate covenants originally entered before July 1, 2025 — and it preserves trade-secret NDAs, a narrow non-solicitation of current employees lasting no more than one year (which may not restrict patient interactions, patient referrals, clinical collaboration, or the physician's professional relationships), and covenants tied to a physician's sale of a practice they majority-owned.
“Any agreement in violation of this section is void and unenforceable.”
Do not assume the 2025 ban covers every Indiana doctor. Senate Enrolled Act 475 reaches physicians employed by hospitals and hospital systems entering new covenants on or after July 1, 2025; private-practice groups remain subject instead to the 2020 requirements and the 2023 primary-care ban, so the rule depends on the execution date, the physician type, and the employer entity.
Sources for this answer
Primary law · 2020-07-01
K.1 House Enrolled Act 1004 (2020), Ind. Code § 25-22.5-5.5-2PDFHouse Enrolled Act 1004 (2020) requires a physician noncompete to include specified provisions to be enforceable.
To be enforceable, a physician noncompete agreement must include all of the following provisions:
See Ind. Code § 25-22.5-5.5-2 (House Enrolled Act 1004, P.L. 93-2020).
Primary law · 2023-07-01
K.4 Senate Enrolled Act 7 (2023), Ind. Code § 25-22.5-5.5-2PDFSenate Enrolled Act 7 requires that an enforceable physician noncompete give the physician an option to buy a complete release at a reasonable price.
(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.
See Ind. Code § 25-22.5-5.5-2(a)(4) (Senate Enrolled Act 7, P.L. 165-2023).
Primary law · 2023-07-01
K.2 Senate Enrolled Act 7 (2023), Ind. Code § 25-22.5-5.5-2.5PDFSenate Enrolled Act 7 bars a primary care physician and an employer from entering into a noncompete agreement.
Notwithstanding any other law, a primary care physician and an employer may not enter into a noncompete agreement.
See Ind. Code § 25-22.5-5.5-2.5(b) (Senate Enrolled Act 7, P.L. 165-2023).
Primary law · 2023-07-01
K.5 Senate Enrolled Act 7 (2023), Ind. Code § 25-22.5-5.5-2PDFSenate Enrolled Act 7 makes a physician noncompete unenforceable when the employer terminates the physician without cause.
The employer terminates the physician's employment without cause.
See Ind. Code § 25-22.5-5.5-2(b)(1) (Senate Enrolled Act 7, P.L. 165-2023).
Primary law · 2025-07-01
K.3 Senate Enrolled Act 475 (2025), Ind. Code § 25-22.5-5.5-2.3PDFSenate Enrolled Act 475 makes a physician-hospital noncompete entered on or after July 1, 2025 void and unenforceable.
Any agreement in violation of this section is void and unenforceable.
See Ind. Code § 25-22.5-5.5-2.3(c) (Senate Enrolled Act 475, P.L. 207-2025).
Do low-wage or hourly Indiana workers have a special non-compete exemption?
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.
A persistent online myth claims that Indiana Code 22-5-8-1 exempts low-wage workers from non-competes. That is false: section 22-5-8-1 is part of the chapter prohibiting the forced implantation of devices (microchips) in employees and has nothing to do with restrictive covenants. No enacted Indiana law protects low-wage workers from non-competes .
Reform has been proposed but not enacted. In the 2026 session, Senate Bill 132 would have voided non-competes for employees earning less than $150,000 a year, and House Bill 1054 targeted certain plumbing-trade covenants — but both received only a first reading and did not advance out of committee before the session adjourned. They signal possible future direction, not current law; recheck the Indiana General Assembly each session.
Do not tell an Indiana worker or employer that low-wage employees are statutorily exempt from non-competes. No such exemption exists; the often-cited Indiana Code 22-5-8-1 is the device-implantation statute, and the 2026 wage-threshold bill did not pass, so ordinary workers remain under the common-law reasonableness test.
Sources for this answer
Case law · 2005-12-21
L.1 Dicen v. New Sesco, Inc.Dicen confirms that, absent a statutory exemption, Indiana non-competes are governed by the disfavored-restraint common-law framework that applies to ordinary workers.
Covenants not to compete are not favored in the law.
See Dicen v. New Sesco, Inc., 839 N.E.2d 684 (Ind. 2005).
Did the FTC's federal non-compete rule change Indiana non-compete law?
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 .
In Ryan LLC v. Federal Trade Commission, a federal court set the rule aside with nationwide effect, holding it would not be enforced or take effect . The FTC has since signaled a shift toward case-by-case enforcement against specific covenants rather than a blanket rule, but that does not change Indiana's governing standards. The outcome leaves Indiana's reasonableness analysis, eraser-style blue pencil, and physician restrictions in control, and does not make any particular Indiana covenant enforceable.
Sources for this answer
Case law · 2024-08-20
M.1 Ryan LLC v. Federal Trade CommissionRyan set aside the FTC Non-Compete Rule with nationwide effect so that it would not be enforced or take effect.
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.
See Ryan LLC v. Fed. Trade Comm'n, 746 F. Supp. 3d 369 (N.D. Tex. 2024).