Employment Law Report
Indiana’s New Non-Compete Regulation: Physician Non-Compete Agreements Prohibited Starting July 1, 2025
Written by: Tyson Gorman with assistance from Colin Flood, Wyatt Summer Associate
On May 6, 2025, Indiana Governor Mike Braun signed Senate Enrolled Act No. 475 (SEA 475), which amended the current 2020 Indiana Physician Non-Compete Statute (Ind. Code § 25-22.5-5.5) and added new limitations to the enforceability of physician non-competes starting July 1, 2025.
New Limitations on the Physician Non-Compete Statute
In recent years, many jurisdictions have adopted or altered laws to allow for greater physician mobility in the interest of public health and fair competition. Indiana’s SEA 475 likewise dictates that a wide range of physicians, and certain employers, may not enter into noncompete agreements starting July 1, 2025. The physicians that SEA 475 applies to are as defined under Ind. Code § 25-22.5-1-1.1(a)(1) and (a)(2), which include all physicians that are licensed to practice medicine or osteopathic medicine in Indiana. SEA 475 also applies to employers like hospitals, as defined by Ind. Code § 16-18-2-179, and hospital-affiliated entities (as well as their parent companies/corporations and affiliated managers).
Specifically under SEA 475, employers cannot prohibit physicians from practicing medicine with a new employer, impose financial penalties or repayment obligations that are based solely or primarily on the physician’s decision to continue engaging in the practice of medicine with a new employer, require the physician to obtain employer consent or submit to equitable relief, or impose indirect restrictions that have the effect of limiting or deterring the physician’s practice of medicine with a new employer. Any future noncompete agreements that include such limitations will be void and unenforceable under the new law.
Not Limited by SEA 475
However, SEA 475 is not applicable to existing physician noncompete agreements entered into before July 1, 2025. Amending or renewing an existing noncompete will not trigger the new limitations imposed by SEA 475. Furthermore, SEA 475 does not ban agreements calling for nondisclosure of confidential business information or trade secrets; non-solicitation agreements that prohibit solicitation of current employees for one (1) year after the physician’s employment ends subject to some limitations; and noncompete clauses tied to the sale of the business where the physician-owned more than 50% of the business at the time of the sale.
Moving Forward
Healthcare entities subject to this new law should adapt their contractual agreements to ensure compliance with Ind. Code § 25-22.5-5.5. People with questions relating to SEA 475 and Ind. Code § 25-22.5-5.5 and the new limitations are encouraged to contact a member of Wyatt’s Labor and Employment team. To read the Senate Enrolled Act No. 475, view here.
