What to know about Indiana's new noncompete law

As discontent among physicians on noncompete agreements grows, many states have amended their regulations — Indiana being one of the latest.

Here is a summary of the state's recent noncompete policy changes, as detailed by attorneys from the law firm Amundsen Davis and published Nov. 10 on JDSupra.

Prior to 2020, Indiana regulated noncompete agreements involving physicians the same way as those in other occupations. In 2020, the state enacted specific provisions that must be included in any physician noncompete agreement originally entered into on or after July 1, 2020, with stipulations including providing patients with the physician's contact information upon the physician's termination, providing the physician with access to patient medical records post-termination and allowing any physician subject to a noncompete the ability to buy out the agreement.

As of July 1, 2023, additional restrictions regarding physician noncompetes took effect.

Below are three of the most significant changes:

1. Noncompetes are no longer enforceable for primary care physicians. 

2. Noncompetes must include a buyout option for the physician. New contracts must provide a process for negotiating the price of the buyout, along with a mediation process if the parties are unable to agree on a reasonable purchase price.

3. Circumstances of a physician's termination may render a noncompete unenforceable, such as if the physician was fired "without cause," the physician terminates their own employment "for cause," or if the physician's contract has expired and both the physician and employer have fulfilled their respective obligations of the contract. The law does not define "without cause" or "for cause," which leaves room for interpretation for physicians to dispute whether their termination was "for cause."

The ban on noncompetes for primary care physicians has already had an effect across the state. Indianapolis-based Eskenazi Medical Group removed noncompete clauses from all physician contracts, regardless of specialty, which may prompt other employers to follow suit, according to the article.

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