Does Indiana enforce non-compete agreements?

On Behalf of | Mar 12, 2022 | Employment Contracts |

Indiana courts do not usually look favorably on non-compete agreements or restrictive covenants. The burden of proof is on your employer to show the contract you signed is valid. However, you still might face limitations in your employment after moving on from a company.

According to the Center for American Progress, Indiana does not have explicit laws that protect workers from exploitative arrangements with their employers. This means that if you sign a non-compete agreement, you have a level of personal responsibility you must consider. If you find yourself in a dispute over a non-compete agreement, here is what the courts look at before they’ll enforce the contract.

Unreasonable time restrictions

First, they assess the time restriction on the contract. Courts typically revert to precedent to make their decision. Any amount of time over five years is rarely enforceable. However, it depends on your role in the company and how much knowledge you carry about trade or industry secrets.

Role in the company

If you were not privy to industry secrets, then it is likely the courts will deem your non-compete agreement unenforceable. The point of restrictive covenants is to protect a business’s interests, not keep you unnecessarily unemployed.

Adequate compensation

Courts will not uphold a non-compete if you do not receive compensation in return for signing it.

Unreasonable geographic restrictions

Unreasonable geographic restrictions will void a non-compete agreement. For example, if you worked for a local business, they cannot prevent you from working in a region they do not do business in.

Non-compete agreements must be reasonable before a court enforces them. If you believe the restrictions do not protect your employer’s interests, there is a good chance you can get the contract struck down in court.


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