Indiana Agreement Creating Restrictive Covenants

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Multi-State
Control #:
US-0064BG
Format:
Word; 
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Description

If you are planning on buying a home, condominium, townhouse, or other property, you must take note of whether any restrictive covenants will affect your ability to use your new residence.

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FAQ

Restrictive covenants in the labor and employment context are agreements between an employer and employee that restrict the activities of an employee following a separation of employment.

Generally, Indiana courts don't look favorably on non-compete contracts. The employer has the burden of proof, meaning they must show the court that the agreement is enforceable. The court may find a contract to be completely void or may hold both parties to a modified version.

As of July 1, 2023, Indiana law expressly prohibits employers and ?primary care physicians? from entering into noncompete agreements.

Section 25-22.5-5.5-2 - Requirements of physician noncompete agreements to be enforceable (a) Subject to subsection (b), to be enforceable, a physician noncompete agreement must include all of the following provisions: (1) A provision that requires the employer of the physician to provide the physician with a copy of ...

The state of Indiana has some of the highest standards for non-compete agreements. Generally, such contracts or covenants are discouraged under Indiana law, as they can result in a power imbalance between employer and employee.

To be enforceable, the restrictive covenant must define reasonable limits, either ing to a period of time, geographical area, or type of work. In some states, such as California, there are specific laws that make non-solicitation agreements unenforceable unless they are introduced to protect trade secrets.

Unreasonable terms Indiana courts will not enforce a non-compete unless its restrictions are reasonable in scope as to time, activity, and geographic area restricted. Depending on the language of your non-compete agreement, you may be able to challenge the reasonableness of the terms.

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Indiana Agreement Creating Restrictive Covenants