Sec. 1.4. (a) As used in section 2.3 of this chapter, "noncompete agreement" means a contract, or any part of a contract, to which a physician is a party that has the purpose or effect of restricting or penalizing a physician's ability to engage in the practice of medicine in any geographic area, for any period of time, after the physician's employment relationship with a hospital, a parent company of a hospital, an affiliated manager of a hospital, or a hospital system has ended. The term includes any provision that does the following: (1) Prohibits the physician from engaging in the practice of medicine with a new employer. (2) Imposes financial penalties or repayment obligations, or requires reimbursement of bonuses, training expenses, or similar payments that: (A) apply to a physician that has been employed by: (i) a hospital; (ii) a parent company of a hospital; (iii) an affiliated manager of a hospital; or (iv) a hospital system; for at least three (3) years; and (B) are based solely or primarily on the physician's decision to continue engaging in the practice of medicine with a new employer. (3) Requires the physician to: (A) obtain employer consent; or (B) submit to equitable relief; to engage in the practice of medicine with a new employer, regardless of geographic area or specialty. (4) Imposes indirect restrictions that have the effect of limiting or deterring the physician's practice of medicine with a new employer. (b) The term does not include the following: (1) A nondisclosure agreement that protects confidential business information or trade secrets. (2) A nonsolicitation agreement that prohibits solicitation of current employees for a period not exceeding one (1) year after the physician's employment ends. However, the nonsolicitation agreement may not restrict: (A) patient interactions; (B) patient referrals; (C) clinical collaboration; or (D) the physician's professional relationships. (3) An agreement made in connection with the bona fide sale of a business entity when the physician owns more than fifty percent (50%) of the business entity at the time of sale.
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