Are Non-Competes Enforceable in Indiana? Your Rights Explained

In Indiana, non-compete agreements are enforceable, but only if they are reasonable. Indiana has no statute that bans non-competes outright, and unlike a handful of states it has no general law voiding them for low-wage or hourly workers. Instead, Indiana courts treat non-competes as restraints of trade that are "disfavored" in the law and "strictly construed against the employer." To hold up, the agreement must protect a legitimate business interest and be reasonable in the activity it restricts, the geographic area it covers, and how long it lasts. If any of those is broader than necessary, an Indiana court can refuse to enforce it. The one major statutory carve-out is for physicians: under Indiana Code Chapter 25-22.5-5.5, non-competes with certain doctors are now restricted, and agreements with primary care physicians signed on or after July 1, 2023 are barred.

The Basic Rule: Reasonable or Unenforceable

Indiana follows the common-law "rule of reason." A non-compete is a contract that limits where and for whom you can work after you leave a job, and because it interferes with your ability to earn a living, Indiana courts examine it carefully. The burden is on the employer to prove the restriction is reasonable. Courts will not simply assume a non-compete is valid because you signed it.

To be enforceable, an Indiana non-compete generally must satisfy three requirements:

• A legitimate protectable interest. The employer must show a real interest worth protecting, such as trade secrets, confidential business information, or the goodwill the company built with customers. An employer cannot use a non-compete just to keep you from competing in general. Ordinary skills, general knowledge, and your own experience are not protectable.
• Reasonable scope. The limits on activity (what work you cannot do), geography (where), and time (how long) must be no broader than needed to protect that interest. A clause that bars you from any job in any industry, nationwide, for several years is far more likely to be struck down than a narrow one tied to your actual customers or territory.
• Adequate consideration. You must have received something of value in exchange for the promise. In Indiana, an offer of new employment, or even continued employment for an at-will worker, can be enough consideration to support a non-compete.

How Indiana Courts Handle Overbroad Clauses: The "Blue Pencil"

If part of a non-compete is too broad, Indiana applies a strict version of the "blue pencil" doctrine. A court may strike out unreasonable words or a clearly divisible, overbroad portion if what remains is still reasonable and the clause was drafted in a way that lets the bad part be removed cleanly. What an Indiana court will not do is rewrite the agreement or add new, narrower terms to save it. In practice, this means a sloppily drafted, overbroad non-compete is often unenforceable in full, because the court cannot fix it for the employer. This is an important point of leverage if you are trying to challenge an agreement.

No General Low-Wage Ban, but Watch the Physician Rules

Some states (such as Oregon, Maine, Illinois, and Washington) void non-competes for workers below a certain salary threshold. Indiana has not adopted a general wage-based ban. A low-wage Indiana worker is not automatically exempt from a non-compete the way a worker in those states might be. However, a non-compete imposed on a low-level employee who has no access to trade secrets or customer goodwill will often fail the "legitimate protectable interest" test anyway, because there is nothing legitimate for it to protect.

The clearest statutory limit in Indiana is for physicians. Indiana Code 25-22.5-5.5 sets special rules for non-compete agreements with doctors. For physicians who can still be subject to a non-compete, the agreement must include specific provisions, such as giving the physician notice of patient contact information and a process to buy out of the restriction at a reasonable price. Following a 2023 amendment, Indiana bars new non-compete agreements with primary care physicians entered into on or after July 1, 2023. If you are a physician, the exact terms that apply depend on your specialty and when your contract was signed, so confirm the current statute.

What About a Federal Ban?

You may have heard that non-competes were going to be banned nationwide. In 2024, the Federal Trade Commission issued a rule that would have prohibited most non-competes, but federal courts set that rule aside before it took effect. As of 2026, there is no federal law banning non-competes for most private-sector workers, so Indiana's state rules are what govern your agreement. Because the legal landscape around the FTC rule has shifted, verify the current federal status before relying on any nationwide ban.

Wage and Labor Baselines: How Indiana Compares

Non-competes are separate from your wage rights, but workers often ask about both. The federal Fair Labor Standards Act (FLSA) sets a national minimum wage of $7.25 per hour and requires overtime at one and a half times your regular rate for hours worked over 40 in a workweek. Indiana's state minimum wage tracks the federal figure at $7.25 per hour as of 2026; the state has not set a higher rate. Because rates can change, confirm the current minimum wage with the Indiana Department of Labor before relying on a number. A non-compete does not change these wage protections.

What to Do If You Are Asked to Sign or Are Being Threatened

If an employer hands you a non-compete, do not assume it is automatically valid or automatically void. Take these steps:

• Read it before you sign. Note the activity restricted, the geographic area, the time period, and whether it references trade secrets or customers. Ask for a copy and time to review it.
• Try to negotiate. Many employers will narrow the scope, shorten the term, or limit the geography if you ask. Get any changes in writing and signed.
• Keep records. Save the signed agreement, your offer letter, and anything describing what you received in exchange (a raise, bonus, or new position).
• Do not ignore a cease-and-desist letter. If a former employer threatens to enforce a non-compete, the dispute is decided in civil court, not by a state agency. The employer would have to sue and prove the agreement is reasonable. A lawyer can assess whether the clause is overbroad, whether you actually have protectable information, and whether the "blue pencil" problem makes it unenforceable.
• Get advice early. Because Indiana construes these agreements against the employer, an experienced employment attorney can often identify weaknesses before you turn down a job offer or accept one in violation of an old contract.

Where to Verify Indiana's Rules

Non-compete enforceability in Indiana is governed mainly by court decisions interpreting common law, plus the physician statute in the Indiana Code (Title 25). The Indiana Code is published by the Indiana General Assembly and is the authoritative source for statutes such as the physician non-compete provisions. For wage, overtime, and general labor questions, the Indiana Department of Labor is the state agency to consult. Physician-specific questions may also involve the Indiana Professional Licensing Agency and the Medical Licensing Board of Indiana. Because non-compete law turns on the specific facts of your job and the exact wording of your agreement, treat this as general information and consult a licensed Indiana attorney for advice on your situation.

Official Indiana Sources

This page is based on Indiana employment law. Rules and figures change — verify the current details directly with the official Indiana sources below. This is general legal information, not legal advice.

• Indiana Department of Labor (IDOL) — official Indiana agency.
• Indiana DOL Wage & Hour Online Wage Claim Form
• Indiana Code Title 22 (Labor and Safety), Article 2 — Wages, Hours, and Benefits

Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside Indiana state law.