Non-Solicitation Agreements in Indiana: Court Standards
Indiana's Common Law Approach
Indiana does not have a specific statute governing non-solicitation agreements. Courts evaluate these clauses under common law, applying the reasonableness framework established in cases like Donahue v. Permacel and Harvest Insurance Agency v. Inter-Ocean Insurance Co. Indiana courts disfavor restraints on trade but will enforce reasonable restrictions that protect legitimate employer interests.
Factors Indiana Courts Weigh
Indiana courts use a balancing test that considers:
- Legitimate employer interest: The employer must identify a protectable interest such as customer relationships, goodwill, or trade secrets
- Reasonable scope: The clause must be limited to customers with whom the employee had direct contact or influence
- Reasonable duration: Indiana courts have generally upheld restrictions of one to two years, with longer periods facing skepticism
- Consideration: For new employees, the job itself is adequate consideration. For existing employees, Indiana courts have required additional consideration like a promotion, bonus, or access to confidential information
- Not unduly burdensome: The restriction must not prevent the employee from earning a living
The Blue-Pencil Doctrine in Indiana
Indiana courts apply a strict blue-pencil doctrine, meaning they can strike unreasonable provisions from a restrictive covenant but generally cannot rewrite or add language. This is more limited than states that allow full judicial reformation. If your non-solicitation clause is drafted as a single, indivisible provision, a court may void it entirely rather than attempt to narrow it.
Red Flags
- No additional consideration for agreements signed after you began employment
- Language that prevents you from doing business with anyone who has ever been a company customer
- Clauses that combine non-solicitation with non-compete language in a single provision
- Duration exceeding two years
- No clear list or definition of covered customers
When to Consult a Lawyer
Consider talking to an Indiana employment attorney if you signed a non-solicitation agreement without receiving a raise or other new consideration, if the scope of restricted customers seems to extend beyond your actual client relationships, or if your former employer is pursuing legal action.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.