Allowed if reasonable

Non-compete law in Iowa

Iowa has no general noncompete statute; enforceability of employee noncompetes is left to common-law reasonableness (no case cited here). Narrow statutes apply in health care: a health care employment agency may not restrict an agency worker's employment by a noncompete clause in its contracts with the worker or a health care entity (Iowa Code § 135Q.2(3), with an exception for certain 24-36-month placements of workers the agency helped obtain U.S. work authorization), and a health care technology platform may not do so with independent nursing services professionals (§ 135Q.3(3)); violating contracts are unenforceable. A 2026 law (HF 2254, 2026 Iowa Acts ch. 1173, effective 2026-06-02) adds Iowa Code section 262.9(43), requiring a policy that prohibits the University of Iowa Hospitals and Clinics from including a noncompete clause in contracts with advanced registered nurse practitioners, licensed practical nurses, pharmacists, physicians, physician assistants and registered nurses entered into, extended or renewed on or after that date.

Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.

Employee non-competes
Not banned; conditions apply
Pay floor
None in the statute
Duration
No statutory cap (common-law reasonableness).

Exceptions and special rules

  • No statute located on sale-of-business covenants; governed by common law.
  • Health professionals employed by the University of Iowa Hospitals and Clinics (ARNP, LPN, pharmacist, physician, physician assistant, RN). Policy must prohibit UIHC from including a 'noncompete clause' (any restriction on practicing in a geographic area or for a defined period after the employment contract ends) in employment contracts entered into, extended or renewed on or after the Act's effective date. Applies to this one public employer only. (Iowa Code 262.9(43) (2026 Iowa Acts ch. 1173 (HF 2254) sec. 1))
  • Health care employment agency workers (nurses, aides and similar staff placed by an agency on temporary or temp-to-hire assignments). A health care employment agency may not restrict an agency worker's employment opportunities by a noncompete clause in any contract with the worker or a health care entity, or require liquidated damages, employment fees or other compensation if the worker is later hired permanently by the health care entity. Exception: contracts placing a worker whom the agency helped obtain U.S. work authorization, with an initial term of at least 24 months, total term of at most 36 months, and a single health care entity. Violating contracts are unenforceable in court. (Iowa Code § 135Q.2(3) (2022 Acts ch 1069; 2023 Acts ch 131; 2024 Acts ch 1157, ch 1185))
  • Independent nursing services professionals using a health care technology platform. A health care technology platform may not restrict the professional's employment opportunities by a noncompete clause in any contract with the professional or a health care entity, or require payments if the professional is later hired or engaged directly by the health care entity; violating contracts are unenforceable in court. (Iowa Code § 135Q.3(3) (2024 Acts ch 1157, ch 1185))

Remedies

No statutory remedy scheme; the UIHC law directs a policy rather than creating a private right of action.

Which agreements it covers

UIHC rule: contracts entered into, extended or renewed on or after 2026-06-02 (HF 2254 sec. 1, subsection 43(b); effective on enactment per sec. 2).

Recent changes

  • 2026-06-02. HF 2254 approved by the Governor and effective on enactment: UIHC noncompete policy requirement (2026 Iowa Acts ch. 1173). The introduced bill covered physicians only; the enrolled act added ARNPs, LPNs, pharmacists, physician assistants and RNs. Source

Primary sources

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Several statutes treat contractors differently.

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