§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in Indiana is governed by Common law; IC § 22-5-3 (broadcast employees). Non-competes enforceable if reasonable in scope, time, and geography. Indiana courts apply a strict blue-pencil approach.
§ 2. Compensation Threshold Requirements
Indiana does not impose a minimum salary threshold for non-compete enforceability. This means non-competes may be enforced against employees at any income level, including hourly and part-time workers.
§ 3. Temporal Limitations on Post-Employment Restrictions
Indiana does not codify a maximum duration. Courts typically uphold 1-2 years. In practice, 1-2 years is generally considered the outer limit of reasonableness, though outcomes vary significantly based on the employee's role and access to trade secrets.
§ 4. Judicial Modification (Blue Pencil Doctrine)
Indiana follows the blue pencil doctrine: courts can narrow overbroad non-compete provisions rather than voiding the entire agreement. This means even a poorly drafted non-compete may be partially enforced after judicial modification.
§ 5. Statutory Exemptions & Carve-Outs
Indiana law exempts certain workers from non-compete enforcement:
- Broadcast employees
§ 6. Consideration & Contract Formation
Continued employment is generally sufficient. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 7. Effect of Involuntary Termination
Courts may consider but do not automatically void non-competes after termination. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.
Practitioner Notes
Broadcast employee exemption.