indentured servitude?

I recently left a franchised ballroom dance studio for several reasons; poor pay, little training, poor working conditions with the employer, labor law violations, general feeling of discomfort with business practices,etc. I also left because I needed a more flexible schedule to pursue some other obligations, one of which was taking some college courses.
At the time I was hired, I was asked to sign a "personnel training agreement". I was told this agreement would last a year, and if I chose to leave before that time, I would be asked to pay a $2500 fee for the training. I had worked there part time for 3 years when I left, and was sought out a few weeks later to work as a part time independent instructor for another studio.
At this time, I discovered that my contract covered more than the one year period that my employer had explained to me, and had an covenant to not compete. The clause is supposed to last for two years, and within at least a 25 mile radius. The owner of the new studio had had a non-compete with the same company years ago and the judge dismissed the case, saying that in Indiana, he could not be prevented from working in his trade, after fulfilling the one year training agreement. I have also seen several other former employees break clauses in this agreement, and not be pursued.
My question is can this contract be legitimate? Could I work somewhere as long as I don't actively recruit students from my former studio, or take any action against my former employer that might damage her business?