What are non-compete agreements?

Non-compete agreements often prohibit workers from leaving a job and taking another in the same industry, usually within a certain time frame, geographic area or both. Proponents argue these agreements help protect trade secrets, prevent employees from stealing clients as well as increase employers’ willingness to invest time and money to train and develop workers’ skills.

Traditionally, they have been applied to high-paid employees like executives, research personnel and physicians. But lately, such agreements have been applied to much-wider swath of workers: about 1 in 5, according to the Federal Trade Commission. They've been included in contracts for lower-paid workers like sandwich makers and janitorial workers.

Indiana lawmakers passed a limited ban on non-competes for primary care physicians – but only for those whose contracts start after July 2023.

The FTC rule is set to take effect on Sept. 4, 2024 – though it faces legal challenges.