Indiana: Noncompete Restrictions Enacted for Physicians

APPLIES TO

All Employers with IN Physician Employees

EFFECTIVE

July 1, 2020

QUESTIONS?

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(888) 378-2456

Indiana HB 1004 imposed restrictions on noncompete agreements with physicians originally entered into on or after July 1, 2020. To be enforceable, a noncompete agreement with a physician must include all of the following provisions:

  • A provision that requires the employer to provide the physician with a copy of any notice that concerns the physician’s departure, and was sent to any patient seen by the physician during the two years preceding the physician’s termination or the expiration of the physician’s contract. Patient names and contact information must be redacted from the copy of the notice provided from the employer to the physician.
  • A provision that requires the employer to, in good faith, provide the physician’s last known or current contact and location information to a patient who requests updated contact and location information for the physician, and was seen by the physician during the two years preceding the termination of the physician’s employment or the expiration of the physician’s contract.
  • A provision that provides the physician with access to or copies of any medical record associated with a patient who received a notice about the physician’s departure or requests updated contact information for the physician, upon receipt of the patient’s consent.
  • A provision that provides the physician, whose employment has terminated or whose contract has expired, with the option to purchase a release from the noncompete agreement at a reasonable price. However, in the event the physician elects not to exercise the purchase option, then the provision may not be used to limit the employer’s remedies, including the employer’s enforcement of the noncompete agreement.
  • A provision that prohibits providing patient medical records to a requesting physician in a format that materially differs from the format used to create or store the medical record during the ordinary course of business, unless a different format is mutually agreed upon by the parties.

Unfortunately, the term “noncompete” is not defined and it is unclear how broadly it will be interpreted. Similarly, there is no direction on what is considered a “reasonable price” to be released from the noncompete agreement. Employers should review these new requirements with legal counsel for further guidance.

Action Items

  1. Have noncompete agreements updated.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2020 ManagEase

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