A BILL FOR AN ACT to amend the Indiana Code concerning labor and safety.
Summary
SB 132 creates a new chapter in the Indiana Code restricting the use of noncompete agreements. It bars employers and employees from entering into a noncompete agreement when the employee’s annual compensation is less than $150,000. The bill defines compensation broadly to include hourly wages, salary, and commissions, and it defines employer and employee broadly enough to cover private employers, state agencies, and political subdivisions.
The bill applies only prospectively and does not affect noncompete agreements entered into before April 1, 2026. Any agreement that violates the new restriction would be void and unenforceable. The bill also states that, where it conflicts with other Indiana law, including IC 25-22.5-5.5, the new chapter controls. An emergency is declared, making the measure effective upon passage.
Impact
The bill would significantly limit enforceability of noncompete agreements in Indiana for workers earning under $150,000 annually, affecting employers across the private sector as well as state and local government entities. It would amend Indiana Code Title 22 by adding a new chapter on noncompete agreements and would override conflicting state law provisions, including existing statutes referenced in the bill. The practical effect would be to invalidate lower-wage noncompete clauses and reduce employers’ ability to restrict job mobility for a broad class of employees.
Sentiment
Based on the bill text and available context, the measure appears to be a policy-driven labor reform with no recorded committee debate or votes in the provided materials. The overall framing is straightforward and protective of employee mobility, suggesting support for limiting noncompete agreements for workers below the compensation threshold. Because no transcripts or vote history are available, there is no documented opposition or endorsement in the supplied record.
Contention
The main point of contention is likely the compensation threshold: the bill draws a bright line at $150,000, which would leave noncompetes permissible for higher-paid employees while banning them for everyone below that level. Employers may view this as a substantial restriction on protecting trade secrets, client relationships, and workforce investment, while employee advocates would likely support the change as a way to improve job mobility and wage growth. Another possible issue is the bill’s broad reach to public employers and its express override of conflicting Indiana law, which could raise concerns about interaction with existing professional or industry-specific noncompete rules.