Non-Compete Agreements
Understanding Idaho’s Laws on Non-Compete Agreements: What Employers and Employees Need to Know
If you are considering starting a business in Idaho, or even purchasing a business here, it is highly recommended that you seek the advice of a knowledgeable business attorney. It is essential that they have a comprehensive understanding of non-disclosure and non-compete agreements, especially if you have valuable business interests that you wish to keep secure from competitors.
What is a covenant not to compete?
Essentially, a covenant not to compete is a non compete agreement. In Idaho, generally a non-compete agreement is a contract that restricts an employee from becoming a competitor of their current employer for a specified period of time. It is important to establish this agreement early in the business relationship, and it is typically enforced between an employer and their employee and sometimes against independent hired help or independent contractors.
Agreements & Covenants Protecting Legitimate Business Interest
In 2008, the Idaho legislature enacted Chapter 27 of Title 44 of the Idaho Code which governs Agreements and Covenants Protecting Legitimate Business Interest. These laws allow employers to protect their “legitimate business interest” by prohibiting a “key employee” and a “key independent contractor” from “engaging in employment or a line of business that is in direct competition with the employer’s business after termination of employment” if they choose to through written agreement.
However, the agreement must be reasonable as to its duration, geographical area, type of employment or line of business, and does not impose a greater restraint than is unreasonably necessary to protect the employer’s legitimate business interest.” Idaho Code 44-2702(1).
What are “Key Employees” & “Key Independent Contractors” as defined by Idaho Law?
“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.
What are “Legitimate Business Interests” as defined by Idaho Law?
“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. Idaho Code 44-2702(2).
Experienced Idaho Business Lawyers are here to help you
If you are a business located in Idaho and are looking to draft legally valid non-compete agreements, the attorneys at Gem State Attorneys are here to help. Our experienced attorneys will take the time to understand your unique situation and discuss your legal options to ensure your business interests are protected. To arrange a free case review with our lawyers, please call us at (208) 900-9529 or contact us online. We look forward to hearing from you.
Disclaimer: The information provided on this blog is for general informational purposes only and is not intended to be legal advice. The content of this blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking professional legal counsel. The opinions expressed at or through this blog are the opinions of the individual author and may not reflect the opinions of the blog or any individual attorney.