Idaho Non-Compete Agreement | Laws

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Updated June 02, 2022

An Idaho non-compete agreement restricts an employee’s ability to work in a field that is a direct competitor with the employer. The employee can be prohibited from working in the same field for a period of up to 18 months and must be “reasonable” in its limitations of duration and geographical area. A non-compete period typically begins immediately after termination of employment.

StatutesTitle 44, Chapter 27 (Agreements and Covenants Protecting Legitimate Business Interests)

Legally Enforceable?

Yes, a non-compete is enforceable to “key employees” and “key independent contractors” that protects the legitimate business interests of an employer. An agreement must be reasonable and written to cover a specific duration and geographical area.

In addition, a non-compete cannot include language that imposes a greater “restraint than is reasonably necessary to protect the employer’s legitimate business interests.”

Source: § 44-2701

Rebuttal Presumptions

The following are “rebuttal presumptions” in the favor of an employer if a non-compete is disputed:

  • Duration. Limited to 18 months;
  • Employment types. For “key employees” or “key independent contractors;”
    • Top 5%. It shall be determined that if a person is being paid in the top 5% that they are automatically deemed a “key employee” or “key independent contractor.”
  • Geographical area. Must be specified for a geographical area where the individual provided services or had a significant presence.
  • Legitimate business interest. Must be for the protection of a legitimate business interest.
  • Reasonable. Must be reasonable in regard to the employment or line of business being offered.

Source: § 44-2704

“Key Employees” and “Key Independent Contractors” Defined

“Key employees” and “key independent contractors” shall include those employees or independent contractors who, by reason of the employer’s investment of time, money, trust, exposure to the public, or exposure to technologies, intellectual property, business plans, business processes and methods of operation, customers, vendors or other business relationships during the course of employment, have gained a high level of inside knowledge, influence, credibility, notoriety, fame, reputation or public persona as a representative or spokesperson of the employer and, as a result, have the ability to harm or threaten an employer’s legitimate business interests.

Source: § 44-2702(1)

“Legitimate Business Interest” Defined

“Legitimate business interests” shall include, but not be limited to, an employer’s goodwill, technologies, intellectual property, business plans, business processes and methods of operation, customers, customer lists, customer contacts and referral sources, vendors and vendor contacts, financial and marketing information, and trade secrets as that term is defined by chapter 8, title 48, Idaho Code.

Source: § 44-2702(2)

Attorneys Restricted

A licensed attorney may not enter into a non-compete that restricts their right to practice law.

Source: Rule 5.6 (Rules of Professional Conduct)

Continued Employment

An employee that agrees to a non-compete and is promised continued employment will be deemed sufficient consideration for a non-compete.

Source: § 44-2704(1)

Maximum Term

18 months is the maximum reasonable term for a non-compete unless consideration is given to the person and they are a “key employee” or “key independent contractor.” If conditions are met, a non-compete may be extended for a longer period.

Source: § 44-2704

Blue Penciling

By statute, an Iowa court is permitted to limit and modify an agreement that is found to be unreasonable in any respect. A court is allowed to limit and modify a non-compete as necessary to determine the intent of the parties and render it reasonable.

Source: § 44-2703