1. (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. (1) Prohibits the physician from engaging in the practice of medicine with a new employer.

   2. (2) Imposes financial penalties or repayment obligations, or requires reimbursement of bonuses, training expenses, or similar payments that:

      1. (A) apply to a physician that has been employed by:

         1. (i) a hospital;
         2. (ii) a parent company of a hospital;
         3. (iii) an affiliated manager of a hospital; or

         4. (iv) a hospital system;

            for at least three (3) years; and

      2. (B) are based solely or primarily on the physician's decision to continue engaging in the practice of medicine with a new employer.

   3. (3) Requires the physician to:

      1. (A) obtain employer consent; or

      2. (B) submit to equitable relief;

         to engage in the practice of medicine with a new employer, regardless of geographic area or specialty.

   4. (4) Imposes indirect restrictions that have the effect of limiting or deterring the physician's practice of medicine with a new employer.

2. (b) The term does not include the following:

   1. (1) A nondisclosure agreement that protects confidential business information or trade secrets.

   2. (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:

      1. (A) patient interactions;
      2. (B) patient referrals;
      3. (C) clinical collaboration; or
      4. (D) the physician's professional relationships.
   3. (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.

As added by P.L.207-2025, SEC.4.