*ES0475.1*
April 3, 2025
ENGROSSED
SENATE BILL No. 475
_____
DIGEST OF SB 475 (Updated April 2, 2025 3:56 pm - DI 141)
Citations Affected: IC 25-22.5.
Synopsis: Physician noncompete agreements. Provides that beginning
July 1, 2025, a physician and a hospital, a parent company of a
hospital, or an affiliated manager of a hospital may not enter into a
noncompete agreement that interferes with the physician's ability to
treat the physician's patients.
Effective: July 1, 2025.
Busch, Charbonneau, Johnson T,
Ford J.D., Jackson L, Qaddoura
(HOUSE SPONSORS — MANNING, JUDY, CASH)
January 13, 2025, read first time and referred to Committee on Health and Provider
Services.
January 23, 2025, amended, reported favorably — Do Pass.
January 27, 2025, read second time, ordered engrossed. Engrossed.
January 28, 2025, read third time, passed. Yeas 47, nays 2.
HOUSE ACTION
March 3, 2025, read first time and referred to Committee on Public Health. Reassigned to
Committee on Employment, Labor and Pensions.
April 3, 2025, amended, reported — Do Pass.
ES 475—LS 7333/DI 153 April 3, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
ENGROSSED
SENATE BILL No. 475
A BILL FOR AN ACT to amend the Indiana Code concerning
professions and occupations.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 25-22.5-5.5-1.1 IS ADDED TO THE INDIANA
2 CODE AS A NEW SECTION TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2025]: Sec. 1.1. As used in this chapter,
4 "business entity" means a corporation, partnership, sole
5 proprietorship, professional corporation, limited liability company,
6 limited liability partnership, or any other company or organization
7 authorized to do business in Indiana.
8 SECTION 2. IC 25-22.5-5.5-1.2 IS ADDED TO THE INDIANA
9 CODE AS A NEW SECTION TO READ AS FOLLOWS
10 [EFFECTIVE JULY 1, 2025]: Sec. 1.2. (a) As used in this chapter,
11 "competition related penalties agreement" means a contract or a
12 contract provision between a physician and the physician's
13 employer that requires the physician to:
14 (1) pay financial amounts to the employer; or
15 (2) consent to equitable relief for the benefit of the employer;
16 due to the physician's practice of medicine after the employment
17 relationship has ended.
ES 475—LS 7333/DI 153 2
1 (b) The term does not include a contract or a contract provision
2 that requires the physician to:
3 (1) pay financial amounts to the employer; or
4 (2) consent to equitable relief for the benefit of the employer;
5 for reasons other than the physician's practice of medicine after
6 the employment relationship has ended.
7 SECTION 3. IC 25-22.5-5.5-1.3 IS ADDED TO THE INDIANA
8 CODE AS A NEW SECTION TO READ AS FOLLOWS
9 [EFFECTIVE JULY 1, 2025]: Sec. 1.3. (a) As used in this chapter,
10 "noncompete agreement" means a contract or contract provision
11 between a physician and the physician's employer under which the
12 physician agrees not to engage in the practice of medicine in a
13 specified geographic area for a specified period of time
14 immediately after the employment relationship has ended. The
15 term includes a competition related penalties agreement.
16 (b) The term does not include the following:
17 (1) A contract or a contract provision between a physician
18 and the physician's employer that requires the physician to:
19 (A) pay financial amounts to the employer; or
20 (B) consent to equitable relief for the benefit of the
21 employer;
22 for reasons other than the physician's practice of medicine
23 after the employment relationship has ended.
24 (2) An agreement not to solicit or hire employees of the
25 employer.
26 (3) An agreement not to solicit or transact business with
27 customers, clients, or vendors of the employer.
28 (4) A noncompete agreement made in connection with:
29 (A) the sale of:
30 (i) a business entity;
31 (ii) all or substantially all of the operating assets of a
32 business entity; or
33 (iii) a division or subsidiary of a business entity; or
34 (B) the disposal of an ownership interest in a business
35 entity;
36 when the physician is an owner of or a member or partner in
37 the business entity.
38 (5) A noncompete agreement originating outside of a
39 physician's employment relationship with the physician's
40 employer.
41 (6) A nondisclosure or confidentiality agreement.
42 SECTION 4. IC 25-22.5-5.5-1.4 IS ADDED TO THE INDIANA
ES 475—LS 7333/DI 153 3
1 CODE AS A NEW SECTION TO READ AS FOLLOWS
2 [EFFECTIVE JULY 1, 2025]: Sec. 1.4. As used in this chapter,
3 "originally entered into" means an agreement that is entered into
4 for the first time as of a specified date. The term does not include
5 an amendment to an existing agreement or the renewal of an
6 existing agreement.
7 SECTION 5. IC 25-22.5-5.5-1.6 IS ADDED TO THE INDIANA
8 CODE AS A NEW SECTION TO READ AS FOLLOWS
9 [EFFECTIVE JULY 1, 2025]: Sec. 1.6. As used in this chapter,
10 "practice of medicine" has the meaning set forth in
11 IC 25-22.5-1-1.1(a)(1) and IC 25-22.5-1-1.1(a)(2). The term does
12 not include executive, administrative, managerial, or directional
13 activities.
14 SECTION 6. IC 25-22.5-5.5-2.3 IS ADDED TO THE INDIANA
15 CODE AS A NEW SECTION TO READ AS FOLLOWS
16 [EFFECTIVE JULY 1, 2025]: Sec. 2.3. (a) This section does not
17 apply to a physician noncompete agreement originally entered into
18 before July 1, 2025.
19 (b) As used in this section, "hospital" has the meaning set forth
20 in IC 16-18-2-179(b).
21 (c) Notwithstanding any other law, a physician and:
22 (1) a hospital;
23 (2) a parent company of a hospital; or
24 (3) an affiliated manager of a hospital;
25 may not enter into a noncompete agreement that interferes with
26 the physician's ability to treat the physician's patients.
ES 475—LS 7333/DI 153 4
COMMITTEE REPORT
Mr. President: The Senate Committee on Health and Provider
Services, to which was referred Senate Bill No. 475, has had the same
under consideration and begs leave to report the same back to the
Senate with the recommendation that said bill be AMENDED as
follows:
Page 1, delete lines 8 through 14.
and when so amended that said bill do pass.
(Reference is to SB 475 as introduced.)
CHARBONNEAU, Chairperson
Committee Vote: Yeas 10, Nays 2.
_____
COMMITTEE REPORT
Mr. Speaker: Your Committee on Employment, Labor and Pensions,
to which was referred Senate Bill 475, has had the same under
consideration and begs leave to report the same back to the House with
the recommendation that said bill be amended as follows:
Page 1, between the enacting clause and line 1, begin a new
paragraph and insert:
"SECTION 1. IC 25-22.5-5.5-1.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2025]: Sec. 1.1. As used in this chapter,
"business entity" means a corporation, partnership, sole
proprietorship, professional corporation, limited liability company,
limited liability partnership, or any other company or organization
authorized to do business in Indiana.
SECTION 2. IC 25-22.5-5.5-1.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2025]: Sec. 1.2. (a) As used in this chapter,
"competition related penalties agreement" means a contract or a
contract provision between a physician and the physician's
employer that requires the physician to:
(1) pay financial amounts to the employer; or
(2) consent to equitable relief for the benefit of the employer;
due to the physician's practice of medicine after the employment
relationship has ended.
ES 475—LS 7333/DI 153 5
(b) The term does not include a contract or a contract provision
that requires the physician to:
(1) pay financial amounts to the employer; or
(2) consent to equitable relief for the benefit of the employer;
for reasons other than the physician's practice of medicine after
the employment relationship has ended.
SECTION 3. IC 25-22.5-5.5-1.3 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2025]: Sec. 1.3. (a) As used in this chapter,
"noncompete agreement" means a contract or contract provision
between a physician and the physician's employer under which the
physician agrees not to engage in the practice of medicine in a
specified geographic area for a specified period of time
immediately after the employment relationship has ended. The
term includes a competition related penalties agreement.
(b) The term does not include the following:
(1) A contract or a contract provision between a physician
and the physician's employer that requires the physician to:
(A) pay financial amounts to the employer; or
(B) consent to equitable relief for the benefit of the
employer;
for reasons other than the physician's practice of medicine
after the employment relationship has ended.
(2) An agreement not to solicit or hire employees of the
employer.
(3) An agreement not to solicit or transact business with
customers, clients, or vendors of the employer.
(4) A noncompete agreement made in connection with:
(A) the sale of:
(i) a business entity;
(ii) all or substantially all of the operating assets of a
business entity; or
(iii) a division or subsidiary of a business entity; or
(B) the disposal of an ownership interest in a business
entity;
when the physician is an owner of or a member or partner in
the business entity.
(5) A noncompete agreement originating outside of a
physician's employment relationship with the physician's
employer.
(6) A nondisclosure or confidentiality agreement.
SECTION 4. IC 25-22.5-5.5-1.4 IS ADDED TO THE INDIANA
ES 475—LS 7333/DI 153 6
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2025]: Sec. 1.4. As used in this chapter,
"originally entered into" means an agreement that is entered into
for the first time as of a specified date. The term does not include
an amendment to an existing agreement or the renewal of an
existing agreement.
SECTION 5. IC 25-22.5-5.5-1.6 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2025]: Sec. 1.6. As used in this chapter,
"practice of medicine" has the meaning set forth in
IC 25-22.5-1-1.1(a)(1) and IC 25-22.5-1-1.1(a)(2). The term does
not include executive, administrative, managerial, or directional
activities.".
Page 1, delete lines 6 through 7, begin a new paragraph and insert:
"(b) As used in this section, "hospital" has the meaning set forth
in IC 16-18-2-179(b).
(c) Notwithstanding any other law, a physician and:
(1) a hospital;
(2) a parent company of a hospital; or
(3) an affiliated manager of a hospital;
may not enter into a noncompete agreement that interferes with
the physician's ability to treat the physician's patients.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
(Reference is to SB 475 as printed January 24, 2025.)
VANNATTER
Committee Vote: yeas 8, nays 2.
ES 475—LS 7333/DI 153