## Facts

- Central Indiana Podiatry, P.C. (CIP) employed podiatrist Kenneth Krueger from 1996 to 2005 under successive written agreements containing noncompetition and related post-employment restrictions.
- Each agreement restricted Krueger for two years after termination from (1) divulging patient names, (2) contacting patients to provide podiatric services, and (3) soliciting CIP employees.
- The noncompetition clause barred Krueger from practicing podiatry for two years in fourteen listed central Indiana counties, plus any county where CIP maintained an office during the contract term and any county adjacent to the listed/office counties.
- Because CIP had offices in additional counties and many counties were adjacent, the restriction effectively covered forty-three counties.
- Krueger worked at CIP offices in Clinton, Marion, Howard, Tippecanoe, and Hamilton counties, and by 2005 primarily practiced at CIP’s Nora office in Marion County while also working in Lafayette (Tippecanoe) and Kokomo (Howard).
- CIP terminated Krueger in July 2005 following an internal investigation; during the investigation, Krueger obtained an electronic copy of names and addresses of patients treated at CIP’s Nora office.
- In September 2005, Krueger joined Meridian Health Group, P.C. in Hamilton County (a county included in the restriction) and provided Meridian with CIP’s patient list.
- A letter was drafted to those patients announcing Krueger’s new office location near his prior office.
- CIP sued for injunctive relief to enforce the restrictive covenants and restrain competitive practice and use of patient information.
- The trial court found the noncompetition agreement invalid and unreasonable based largely on geographic breadth; the intermediate appellate court upheld the geographic restriction; the state supreme court accepted review.

## Issues

1. Whether noncompetition agreements between a physician (including a podiatrist) and a medical practice group are per se void as against public policy.
2. Whether the agreement’s geographic scope (effectively forty-three counties) was reasonable and enforceable, in whole or in part.

## Decision

- The court held physician noncompetition agreements are not per se void as against public policy and may be enforced to the extent reasonable.
- The court reiterated that employment restrictive covenants are strictly construed against the employer and must be reasonable in time, geography, and restrained activity, and no broader than necessary to protect legitimate interests such as goodwill.
- The court held a physician noncompete is geographically reasonable only in the area where the physician developed patient relationships using the practice group’s resources.
- The forty-three-county restriction was overbroad because it extended beyond the counties where Krueger actually practiced and built patient relationships while employed by CIP.
- The court rejected total invalidation and limited enforceability to the counties (or areas) where Krueger developed patient relationships through CIP, requiring a narrowed geographic application on remand.

## Legal Principles

- Physician noncompetes are enforceable in Indiana if, and only to the extent, they are reasonable; public policy concerns are handled through the reasonableness analysis rather than a categorical ban.
- Restrictive covenants in employment contracts are strictly construed against the employer and must be reasonable in duration, geographic scope, and scope of prohibited conduct, and must protect a legitimate business interest.
- In medical practice settings, geographic limits must correspond to where the physician actually developed patient relationships using the practice’s resources; territory untethered to that interest is unenforceable.
- Courts may refuse to enforce overbroad portions while enforcing the covenant to the extent it is reasonable, rather than choosing between complete enforcement and complete invalidation.
- Restrictions on disclosure and use of patient lists may serve to protect confidential information and goodwill when tied to legitimate interests and reasonable limits.

## Conclusion

The court upheld the general enforceability of physician noncompetes in Indiana but found the agreement’s forty-three-county territorial ban overbroad, limiting enforcement to the locations where the physician actually built patient relationships using the practice group’s resources.


Cent. Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723 (Ind. 2008)