Are non-compete clauses allowed in Idaho and can you get around them? This is a common questions I am asked as a Boise Business Attorney.
Non-compete clauses are generally an agreement entered into at the termination of employment or business venture. The parties generally agree that in exchange for a termination of a contract or business venture, a money settlement or other benefit will be given to the employee or leaving partner. In exchange for the benefit, the leaving party agrees to a contract term limiting where they can conduct the same kind of business, how long they must refrain from conducting the same kind of business and where they can or cannot conduct the same kind of business.
Non-compete clauses are generally enforceable so long as they are not over-limiting resulting in the inability of the party bound by the agreement from making a living. Idaho law takes into account three separate terms of non-compete clauses to determine if it is valid or over reaching. These are the scope of work, the duration of the non-compete and the geographic scope. Until recently, Idaho was fairly consistent about nullifying a non-compete clause in its entirety if any one of the three items was too limiting. So, for example, if your non-compete clause stated that you could not work or do business in the same line of business for 3 years, throughout the U.S., Canada and Mexico, you could have the entire non-compete invalidated because the geographic scope was too excessive and even though the other two terms were reasonable. Recently, however, Idaho has begun to consider only striking the violating term and upholding the remainder of the non-compete. So, what this means is an Idaho court might say it is reasonable to have a 3 year non-compete for the same line of business. It then might say if the original business is only conducted in the northwest, the leaving party can conduct that type of business outside of the northwest.
If you need the help of a Boise Business Attorney, please give us a call at (208) 472-2383 and see what we can do for you.