Non-Compete Agreement Review Checklist — Indiana

Confirm the named employer is the entity that actually holds the goodwill, customer relationships, or confidential information the covenant claims to protect. Indiana puts the burden of proving a legitimate interest on the employer, so a covenant papered with a parent or staffing affiliate that owns none of the protected assets starts the enforcement case a step behind.

The execution date does decisive work for physicians: covenants entered on or after July 1, 2020 must carry the statutory contract terms, primary care physician covenants entered on or after July 1, 2023 are banned, and physician-hospital covenants entered on or after July 1, 2025 are void. An undated physician agreement leaves the reviewer unable to tell which statutory layer governs. A.1

Record the role precisely — it selects the legal track. A primary care physician cannot be bound at all under the 2023 statute, a specialist physician's covenant must satisfy the 2020 contract-term requirements, and for everyone else the role defines the only activity scope a court will accept: a restraint must track the work the employee actually performed. A.2

Check that the governing state is stated. Indiana generally honors a choice-of-law clause, but treat a foreign-law selection in an otherwise Indiana-centered agreement as a deliberate move worth questioning — the usual motive is escaping the strict eraser rule, and the construction-contract limit covered later in this checklist voids the tactic outright for one industry.

Test the definition against what Indiana actually protects. Confidential information is a recognized protectable interest, but an employee's general skills and routine industry knowledge are not — so a definition that sweeps in everything the employee learned on the job converts a protectable-interest recital into evidence of overreach. B.1

Track the statutory definition: independent economic value from secrecy plus reasonable efforts to keep the information secret. Indiana's trade-secret act runs alongside the covenant rather than replacing it, and for hospital-employed physicians whose non-competes are now void, the trade-secret and confidentiality definitions are the protection that remains — they deserve a careful read, not boilerplate treatment. B.2

One defined Restricted Period keeps every duration auditable against the reasonableness test, where the employer bears the burden on time along with activity and geography. Confirm the period is stated as its own severable term — if the duration is tangled into an indivisible clause, an Indiana court cannot shorten it and the whole covenant is at risk. B.3

Tie the geography to where the employer actually does business or where the employee held influence — the employer must prove the territorial reach reasonable, and an everywhere-the-company-operates footprint rarely survives that showing. Prefer a territory drafted in severable tiers (county, then region) so an eraser pass can remove the outer ring without killing the core. B.3

Bound the class to customers the employee actually served or about whom the employee held confidential information, with a stated look-back window. A customer restriction that sweeps in the employer's entire book regardless of contact has drifted from the protectable interest that justifies it — and the employer is the party who must prove that connection. B.1

This definition decides the no-poach clause's fate. Indiana voided an employee non-solicitation covenant precisely because it applied to all of the company's employees, and the eraser rule means a court cannot rewrite an all-employees class into a narrower one. Confirm the class is limited to workers with confidential information or specialized value — typically through a worked-with look-back — and that the limiting language is severable. B.4

Name the specific goodwill, customer relationships, trade secrets, or confidential information at stake. In Indiana this recital maps directly onto the employer's first burden of proof — showing a legitimate interest before reasonableness is even reached — so a generic desire to avoid competition written here is an admission, not a protection. B.1

Describe the genuinely competing activity in concrete terms tied to what the employee did. The activity dimension is where Indiana covenants most often die: a definition that bars work for a competitor in any capacity — including roles untouched by any protectable interest — was held unreasonably broad, and no court here will trim it into shape. B.5

Where ownership or investment in competitors is restricted, look for a passive-holdings carve-out below a stated percentage. A clause that technically forbids holding index funds or ordinary public shares is gratuitous overbreadth — exactly the kind of unreasonable restriction an Indiana court refuses to enforce and will not soften by rewriting.

A drafting convenience, not a requirement — many agreements inline the carve-out language instead. If the capitalized term appears, confirm its percentage matches the operative carve-out it supports.

Pin the verb down so enforcement is not a fact-by-fact dispute over who called whom. A definition limited to initiating contact keeps the restraint modest; one that also captures passively receiving inquiries widens the clause toward the overbreadth that Indiana courts strike rather than narrow. Whatever shape it takes, draft it as its own severable term.

Verify the trigger covers resignation, dismissal, and expiration of a fixed term the same way, since every covenant clock runs from this event. For physicians the cause distinction is statutory: a physician covenant becomes unenforceable when the employer terminates the physician without cause, so the definition must make who ended the relationship — and on what grounds — unambiguous. B.6

Consideration is not the fight in Indiana: continued at-will employment supports a covenant signed mid-employment, even one presented as sign-or-be-fired. The acknowledgement still earns its place by pinning the signing date — which selects the governing physician statute — and by recording what was exchanged, but do not expect a consideration recital to carry an overbroad covenant past the reasonableness test. C.1

No Indiana statute demands it, but it is cheap procedural-fairness evidence in a state whose courts construe every ambiguity against the employer. The acknowledgement reads best alongside a real review window rather than a same-day signature.

Trade-secret obligations should last as long as secrecy does — both the federal definition and Indiana's act key protection to continued secrecy, not a contract date. A fixed expiry quietly converts a statutory right into a lapsing contractual one, and in Indiana the trade-secret layer often matters most where the covenant itself is shaky or, for hospital-employed physicians, statutorily void. D.1D.2

Give ordinary confidential information its own finite term, separate from the perpetual trade-secret track. A perpetual lid on non-secret information is the kind of unreasonable reach Indiana courts refuse to enforce — and the two-track structure is itself a severability play, keeping the defensible obligation divisible from the aggressive one.

Federal law, fully applicable to Indiana agreements: omit the immunity notice and the employer forfeits exemplary damages and attorney fees in a later trade-secret suit against the worker. Because the trade-secret track is often the sturdiest protection an Indiana employer has, giving away its best remedies over a missing paragraph is an unforced error. E.1

Confidentiality and non-disparagement language has to leave wages, hours, and working conditions discussable. Federal labor law protects that speech in every state, and the Board has been striking overbroad clauses in employee agreements — a federal overlay no Indiana drafting choice can contract around. E.2E.3

Confirm the carve-out for disclosure required by law, court order, or a government investigation, with notice to the employer where lawful. Confidentiality obligations cannot block legally compelled disclosure, and a clause that pretends otherwise hands the employee an overbreadth argument against the whole confidentiality section.

Return-or-delete at separation, certified in writing. In a state where the covenant itself may not survive review, the certification is the cleanest contemporaneous evidence for the trade-secret and confidentiality claims that will — and it costs nothing to police.

Optional, and analyzed under the same reasonableness and eraser rules as a non-compete. The decided Indiana case is a warning, not a blessing: a clause reaching all of the company's employees was held overbroad, so confirm this covenant rides the protectable-interest-limited Covered Employees class and the defined Restricted Period rather than restating a workforce-wide ban. G.1

Often the most defensible restraint in the Indiana family — but only when tied to the legitimate interest that justifies it. A clause limited to customers the employee served or knew confidentially sits on firm ground; one sweeping in every customer regardless of contact invites the same overbreadth finding as a bad non-compete, with no judicial trimming available. G.2

Non-dealing bars serving covered customers even when they call first — a materially broader restraint than non-solicitation. Indiana construes every covenant strictly against the employer, so treat this clause as a deliberate risk decision that needs its own protectable-interest story, and confirm it is drafted severably from the narrower non-solicit so the modest clause survives if the broad one falls. G.3

The most disfavored covenant in the family. If it appears, run it through the Indiana gates at the end of this checklist: the employer must prove a legitimate interest plus reasonableness in time, activity, and geography, and the eraser rule means an overreaching version dies rather than shrinks. G.4G.5 One posture note: a covenant ancillary to the sale of a business or an equity interest is judged under a more liberal, buyer-favoring standard, so classify the relationship before judging the breadth. G.6

When the employer can name its real competitors, bind those instead of leaning on an open-ended Competitive Business definition. Indiana rewards the structure twice: a named list is strong reasonableness evidence, and discrete list entries are exactly the kind of clearly divisible parts the blue pencil can strike individually while leaving a working covenant behind. G.7

Rare and deliberate. Confirm the passive-holdings carve-out is intact, the clause shares the defined Restricted Period, and the restriction connects to a protectable interest rather than to a general wish to keep the employee's capital out of the industry — the latter reads as pure anti-competition, which Indiana refuses to protect.

Standard to include with a stated term, but audit the carve-outs: truthful testimony, statements to government agencies, and protected workplace speech must sit outside the clause. The federal Board polices overbroad versions in every state, and a muzzle drafted wider than those carve-outs allow invites the same strict-construction reading Indiana gives every restraint. H.1

The dedicated clause should state which statutory layer governs and implement it. For a physician covenant entered on or after July 1, 2020, the statute conditions enforceability on a list of mandatory provisions — including the physician's option to purchase a complete and final release at a reasonable price, an undefined term that has become a recurring dispute, so look for a stated price mechanism rather than a bare recital. The Indiana gates at the end of this checklist carry the two outright bans. I.1I.2

The worker's representation that no earlier agreement or order blocks the new role. It surfaces an incoming covenant before the first customer call instead of after it — and because Indiana enforcement turns on fact-heavy reasonableness questions, knowing about a prior restraint early is worth far more than litigating it late.

A genuine drafting choice, not a legal requirement. If the clause appears, keep the permitted disclosure factual — the covenant exists and says what it says — because a warning letter built on a covenant that later fails Indiana review is raw material for a tortious-interference counterclaim against the employer that sent it.

The agreement should say whether the clock pauses during a breach — but flag any extension mechanism as an open Indiana question. No statute or precedential appellate decision endorses automatic tolling, an extension clause is itself covenant scope the employer must prove reasonable, and a court that can only erase language will not manufacture extra restricted time the contract did not clearly provide. The most defensible shape is a separate, severable provision tied to the duration of an actual breach. L.1L.2

Look for the acknowledgement that breach may cause irreparable harm and that an injunction is appropriate relief — then remember its limits here. An Indiana court will not enforce an unreasonable restriction however emphatic the recital, and the reported pattern is exactly that: injunctions denied because the employer could not carry the reasonableness burden, recitals notwithstanding. M.1

A commercial choice against an American Rule backdrop: absent a contractual provision, Indiana shifts fees only for claims or defenses that are frivolous, unreasonable, groundless, or litigated in bad faith. Parties routinely contract around that default with a prevailing-party clause — if one appears, check that it runs both ways rather than only toward the employer. M.2

Treat any reformation or modification clause as a dead letter: Indiana courts cannot add terms to an unenforceable covenant even when the agreement purports to authorize it. The blue pencil only deletes, and only where the covenant is clearly divisible — an overbroad restriction written as one interconnected whole dies entirely. So review the structure, not just the breadth: each activity, customer class, territory tier, and duration should stand as its own grammatically severable unit a court could strike individually, with an ordinary severability clause tying the package together. N.1N.2

Per-covenant survival keeps each clock independently checkable — perpetual for trade secrets, finite elsewhere. In Indiana the structure doubles as severability insurance: covenants whose durations stand apart are easier to defend as clearly divisible parts, while a single bundled survival clause is where an indivisible overbroad term hides.

Confirm employer-side assignability to successors and that the worker cannot assign. Whoever ends up enforcing inherits the Indiana posture along with the covenant: the protectable interest must be one the successor can actually claim as its own, and the reasonableness burden travels with the clause rather than being settled by the assignment.

State the governing law, venue, and dispute process. Indiana generally honors these selections, with one hard statutory exception worth screening for: in a contract for the improvement of Indiana real estate, a clause choosing another state's law or requiring out-of-state litigation, arbitration, or dispute resolution is void — so a construction-industry employer cannot route around Indiana covenant law by contract. Elsewhere, a foreign-forum selection paired with an aggressive covenant should be read as a signal the drafter wanted a softer reformation rule than the eraser. Q.1

Standard boilerplate, with one Indiana-specific consequence to check: because continued employment alone supports a replacement covenant signed mid-employment, a routine amendment can quietly re-paper the restraint — and for a physician, the new execution date can move the agreement into a stricter statutory layer than the one it left. Confirm the merger clause states which covenant survives. R.1

Every restraint in the agreement must clear the two-step the employer will have to prove: first a legitimate protectable interest — goodwill, customer relationships, trade secrets, or confidential information, never the employee's general skills — and then reasonableness in the time, activity, and geographic area restricted. S.1S.2 Activity scope is the usual failure point: a clause barring work for a competitor in any capacity was held unreasonably broad even though consideration was solid, so walk each covenant back to the job the employee actually did. S.3

A physician covenant entered on or after July 1, 2020 is enforceable only if it contains every provision the statute mandates, including the physician's option to purchase a complete and final release at a reasonable price — verify each required term is present and the buyout has a workable price mechanism rather than a bare recital of the statutory phrase. S.4S.5 Check the termination interaction too: the covenant becomes unenforceable when the employer terminates the physician without cause, so the enforceability question is never fully settled at signing. S.6

For covenants entered on or after July 1, 2023, a primary care physician and an employer may not enter into a noncompete agreement — notwithstanding any other law. The ban is categorical for the covered class: no buyout, compensation level, or reasonableness showing revives it, and the contract-term requirements for other physician covenants are irrelevant to a clause the statute forbids outright. Confirm the physician's specialty before reviewing anything else in a physician agreement. S.7

For covenants entered on or after July 1, 2025, a physician may not be bound by a noncompete with a hospital, a hospital parent company, an affiliated manager of a hospital, or a hospital system — any agreement in violation is void and unenforceable. The ban reaches new agreements only, and it leaves the employer three narrow tools: trade-secret nondisclosure terms, a current-employee non-solicit of at most one year that does not restrict patient interactions, referrals, clinical collaboration, or professional relationships, and covenants tied to the physician's sale of a majority-owned practice. Identify the employer entity first — a private-practice group falls back to the contract-term and primary-care layers instead. S.8

If the agreement stipulates a damages figure for covenant breach, test it as an Indiana court would: a sum grossly disproportionate to the loss from the breach, or one that prices conduct beyond the protected interest, is an unenforceable penalty — and the state supreme court struck every liquidated-damages provision before it in the leading case. Look for a figure tied to a documented estimate of the specific loss, not a flat in-terrorem number standing in for an injunction. S.9S.10