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Physician

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Employee Restrictive Covenant Agreement

Cover Terms

The terms below are incorporated into and form part of this agreement.

Employer[Legal name of the entity that employs the employee]
Employee[Full legal name of the employee]
Employee Title / Position
Effective Date[Effective date of this agreement — the date the last party signs. It anchors the duration presumptions stated in Cover Terms.]
Governing LawIndiana
Confidentiality
Trade Secrets DurationPerpetual
Other Confidential Information Duration24 months
Employee Non-Solicitation
Duration24 months
Market benchmark (based on 76 companies)HideShow
TermFrequency
12 months44.7%
Selected default24 months34.9%
18 months11.2%
Why this selected default?

Why is this the selected default?

24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. The Act sets no express duration presumption for the no-hire category, so the uniquely-essential scope limit does the primary category work; counsel should size the term to the workforce interest actually protected.

Covered Employee Period12 months
Customer Non-Solicitation
Duration12 months
State-law basis 12 months

Reference only — not part of this agreement.

12 months sits well inside the presumptively reasonable window for a current-customer non-solicit: eighteen months, or for as long as post-separation consideration is paid, whichever is greater. Counsel may extend toward eighteen months, or longer while post-separation consideration is paid, where the interest supports it.

Covered Customer Period12 months
No Business with Covered Customers
Duration12 months
State-law basis 12 months

Reference only — not part of this agreement.

12 months sits within the current-customer window. Because non-dealing has no category of its own, it is drawn to fit inside the current-customer non-solicit exception, and its duration tracks that category's presumption.

Non-Investment
Duration12 months
Passive Public Holdings Thresholdfive percent
Market benchmark (based on 59 companies)HideShow
TermFrequency
Selected default5%39%
1%27.1%
2%20.3%
Why this selected default?

Why is this the selected default?

Five percent of any class of publicly traded securities is the modal passive-investment carve-out threshold observed in benchmarked, publicly-filed employee agreements that include the carve-out (lower 1-3 percent thresholds are the common tighter alternatives). In a state whose law voids restraints except as it specifically provides, a clause forbidding ordinary public shares is gratuitous overbreadth serving no listed interest.

Non-Disparagement
Duration24 months
Physician
Release Buyout Price
State-law basis

Reference only — not part of this agreement.

Indiana's physician noncompete statute requires the buyout option but does not define a reasonable price, which has become a recurring point of dispute; the price or mechanism is therefore left for counsel to state rather than defaulted to a figure the statute does not supply.

Standard Terms

1. Defined Terms

“Competitive Business” means the business activities described in Cover Terms under Competitive Business.

“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee and excluding the general skills, knowledge, and experience Employee acquired during employment.

“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.

“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment and who hold Confidential Information or specialized, hard-to-replace value in which Employer has a legitimate Protected Interest. This class is limited to such employees and does not extend to Employer's workforce at large.

“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.

“Protected Interests” means Employer's Confidential Information, trade secrets, goodwill in its customer, vendor, referral-source, and business-partner relationships, and established customer relationships, but not Employer's interest in avoiding ordinary competition or Employee's general skills or routine industry knowledge.

“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.

“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.

“Solicit” means to directly or indirectly contact, approach, induce, or encourage any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.

“Trade Secrets” means information that qualifies as a trade secret under applicable law.

Drafting Note Covered employees

A no-hire clause reaching any or all of the company's employees is overbroad. Indiana voided exactly such a blanket employee non-solicitation covenant, and because the eraser blue pencil cannot rewrite an all-employees class into a narrower one, the covenant falls whole rather than shrinking . A class confined to workers who hold confidential information or specialized value is the one tied to a protectable interest and left standing.

2. Recitals and Protectable Interests

Employer and Employee acknowledge that each restrictive covenant in this agreement protects one or more of Employer's Protected Interests. Employer would not provide Employee with access to these Protected Interests absent the protections in this agreement. If this agreement is ancillary to the sale of a business or an ownership interest, the applicable covenants remain subject to their stated terms.

Drafting Note Protectable interest

An Indiana non-compete built around a general wish to avoid competition fails before reasonableness is ever reached. The employer must first prove a legitimate protectable interest — specific goodwill, a customer relationship, or confidential information — and a restraint that guards nothing more than ordinary competition is void as against public policy, so a court never tests the reasonableness of its time, activity, or geography .

Drafting Note Enforcement risk from an overbroad restraint

An overbroad Indiana restraint carries enforcement risk beyond its own unenforceability. An emphatic irreparable-harm recital does not rescue an unreasonable covenant — the reported pattern is injunctions denied because the employer could not carry the reasonableness burden — and a warning letter or notice to a new employer built on a covenant that later fails the reasonableness analysis can become raw material for a tortious-interference claim . A restraint the employer is prepared to defend on both the legitimate-interest and the reasonableness burdens is the one that supports an injunction and any pre-litigation enforcement step taken on its strength.

3. Timing, Consideration, and Employee Acknowledgements

In consideration of Employee's employment or continued employment and the benefits provided under this agreement, the parties agree to its terms. Employee acknowledges having had the opportunity to consult with independent legal counsel before signing this agreement. Employee acknowledges that the restrictions in this agreement are reasonable and necessary to protect Employer's Protected Interests. This agreement is effective as of the Effective Date listed in Cover Terms.

4. Confidential Information and Trade Secret Protection

Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue in perpetuity, for as long as the information remains a trade secret. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. This confidentiality obligation does not restrict Employee's use of the general knowledge, skill, and experience Employee acquired during employment.

5. Permitted Disclosures and Protected Conduct

Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law, including Section 7 of the National Labor Relations Act (29 U.S.C. § 157); (d) testifying truthfully in legal proceedings; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing. This notice is provided as required under 18 U.S.C. § 1833(b)(3)(A) in a contract governing the use of a trade secret or other confidential information.

6. Return, Deletion, and Certification of Company Property

Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request.

7. Non-Solicitation of Employees

During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees.

8. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners

During the Restricted Period, Employee must not Solicit the business of any Covered Customer.

9. No Business with Covered Customers

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact.

10. Non-Investment

During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. Passive Public Holdings are permitted.

11. Non-Disparagement

During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law, including protected concerted activity.

12. Physician Covenants and Statutory Requirements

The non-competition covenant does not apply if (a) Employee is a primary care physician and this agreement is entered into on or after July 1, 2023, or (b) Employee is a physician employed by a hospital, a hospital parent company, an affiliated hospital manager, or a hospital system and this agreement is entered into on or after July 1, 2025. Any required release right and buyout price are stated in Cover Terms. The confidentiality and employee non-solicitation covenants remain in effect according to their terms.

13. No Conflicting Obligations

Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.

14. Notice to Future Employers and Other Third Parties

Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach this agreement. Employee consents to this disclosure. Any such disclosure is limited to factual information about the existence and terms of this agreement.

15. Tolling During Breach

If Employee breaches any restrictive covenant in this agreement, the Restricted Period for that covenant is extended by one day for each day of the breach, so that the full duration of the restriction runs from the date the breach ends.

16. Remedies

Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law.

17. Enforceability and Severability

If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect.

18. Survival and Expiration of Each Covenant

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive for the Trade Secrets Duration specified in Cover Terms to the extent they relate to trade secrets, and for the Other Confidential Information Duration specified in Cover Terms for other Confidential Information. All other provisions survive to the extent necessary to enforce rights that arose during employment.

19. Assignment and Successors

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns. The parties intend that a successor may enforce these covenants only to protect a Protected Interest the successor holds as its own, and the assignment does not enlarge the scope of any covenant.

20. Governing Law, Venue, and Dispute Process

This agreement is governed by the law listed in Cover Terms. Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.

21. Entire Agreement, Amendment, Waiver, and Electronic Signatures

This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties. An amendment changes the Effective Date only if the amendment expressly states a new Effective Date. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.

Signatures

By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.

Employer

Employer: [Legal name of the entity that employs the employee]

Signature:

Signatory Name: [Full name of the authorized signatory signing for the employer]

Title: [Title of the authorized signatory signing for the employer]

Date:

Employee

Signature:

Print Name: [Full legal name of the employee]

Date:

Adapted from OpenAgreements Wyoming and Florida restrictive covenant templates. Licensed under CC BY 4.0.