A few months ago, we wrote an article about a bill in the Indiana General Assembly, Senate Bill 7, that would essentially ban noncompete agreements[1] between medical doctors and their employers. The General Assembly enacted the bill and Governor Holcomb signed it, but only after considerable revision. The ban was narrowed, but remaining covenants not to compete will be enforceable less often.
Summary
After July 1, 2023:
Update: Senate Bill 7 dealing with physician noncompete agreements was signed into law by the governor but in a form that differs significantly from the originally introduced version described in this article. Click here for a discussion of the final version of Senate Bill 7 that goes into effect on July 1, 2023.
Covenants not to compete, or noncompete agreements, between employers and employees prohibit an employee from competing with the employer after the employment relationship ends. Noncompete agreements are common in some industries or professions, particularly those that rely heavily on proprietary information or ongoing relationships with clients or customers.
Noncompete agreements are are part of a larger category of contracts, those that restrain the freedom of trade in one way or another. For covenants not to compete, the restraint is the restriction of a person’s right to make a living. If the restrictions are too severe, they can run afoul of public policy or federal or state antitrust statutes, in which case they are unenforceable.
Indiana Business Law Blog