A non-compete agreement is a legal document that allows employers to place restrictions on employees to protect the business’s sensitive information, confidential data, customer lists, and more. Non-competes are often temporary documents that limit where an employee can work during or after employment.
Non-competes are useful tools, but they aren’t always enforceable. Each state has its own rules about what is and is not allowed in a non-compete. Some states allow a wide range of non-compete agreements. Others are stricter about what can and cannot be in an agreement.
Idaho allows non-compete agreements and they are governed by a chapter of the Idaho code called “Agreements and Covenants Protecting Legitimate Business Interests (ACPLBI). Idaho generally allows a wide range of different non-compete agreements, but there are some rules and limitations. Below is a guide to what is and is not enforceable in Idaho.
Is a Non-Compete Legally Enforceable in Idaho?
Non-compete agreements in Idaho are legally enforceable, but there are limits on what can be enforced. In most cases, non-competitors are only allowed for “key” employees, which are defined in the Idaho code as employees in the top 5% of income within the company. [1]
What’s Protected?
The following items can be protected with a non-compete agreement in Idaho:
- Trade secrets
- Technologies
- Intellectual property
- Business plans
- Business processes and methods of operations
- Goodwill
- Customers
- Customer lists
- Customer contacts and referral sources
- Vendors and vendor contacts
- Financial and marketing information
- Potentially others
Reasonable Use and Exceptions
Idaho has several defined reasonable uses and exceptions for non-compete agreements in the state. [2]
The reasonable uses include:
- Applicable to “key employee”
- Reasonable as to duration, geographical area, type of employment or line of business, and does not impose a greater restraint than is reasonably necessary to protect the employer’s legitimate business interests
- Reasonable as to covenantor, covenantee, and public
- Rebuttable presumptions of reasonableness: 18 months; geographic area restricted to areas employee provided services or had significant presence or influence; limited to line of business in which employee worked.
- Presumption that an employee is a “key employee” if in the highest paid 5% employees in the company.
Exceptions to non-compete agreements in Idaho include:
- Non-key employees
Non-Compete Idaho Limitations
Limitations on Time
The state law defines the duration of employment past 18 months post-employment as the presumptively reasonable duration for a non-compete. There have not been many challenges to this duration, but it’s logical to assume that contracts with a duration longer than 18 months post-employment may not be enforceable.
Non-compete Agreement Idaho Geographic Limitations
Idaho code limits the geographic scope to only areas where employees provided services or had significant presence or influence. It’s possible that there could be disagreement about what that area may be. However, it is advisable to limit the geographic scope of the agreement as narrowly as possible to make sure the agreement is enforceable.
- Enforceable when terminated without cause? Yes
- Employee non-solicitation agreement permitted? Yes
- Customer non-solicitation agreements permitted? Yes
- Does continuing employment equal sufficient consideration? Yes
Idaho Non-Compete Agreement Sample
Below, you can download an Idaho Non-Compete Agreement template in PDF and Word format:
