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Noncompete agreements in Indiana

Indiana businesses, of all types and sizes, want to keep their business’s closely guarded secrets outside the knowledge of their competitors. They also probably do not want anyone, including a former employee, accessing their list of clients and then trying to undercut the business’s price.

Not only could this type of unauthorized sharing of information hurt, or even ruin a healthy Fort Wayne enterprise, it also can hurt the system of free competition that people enjoy in Indiana and throughout the United States. Fortunately, Fort Wayne companies do have the right to ask that their employees sign noncompete agreements. Basically, a noncompete agreement says that, for a certain time after he or she leaves the company, he or she will not engage in activities that compete with their former company. These agreements, in the right circumstances, will be enforced by the Indiana courts.

However, the court must first determine that the agreement is in fact reasonable. In doing so, the court will look at the sort of restrictions that the covenant imposes on an employee, and examine the length that the covenant runs and the size of the geographic buffer zone in which the covenant restricts a former employee’s activities. The court will compare how the covenant affects both the employer and employee, and consider the effect on the general public.

In the course of employment litigation, an Indiana court may decide that the covenant is not reasonable. If so, the court can elect, in lieu of not enforcing the agreement, to “blue pencil” or ignore the offending provisions of the contract. But, the court will only do this if the agreement still makes sense when this is done.