An Iowa Non-Compete Agreement is a contract that outlines the limitations on jobs that the employee may accept during employment or after leaving the employer in Iowa. For example, a non-compete could prevent an employee from taking a job with a competitor or a role in which the employee could benefit from using sensitive data or information.
Iowa generally allows non-competes in specific situations and instances. For the most part, Iowa courts prefer non-compete agreements that are narrow in scope and are not unreasonably broad and restrictive.
Legally Enforceable in Iowa?
Non-compete agreements in Iowa are legally enforceable, but there are limits on what can be enforced. Below are the instances in which a non-compete is and is not allowed.
Reasonable Use and Exceptions
Iowa has several defined reasonable uses and exceptions for non-compete agreements in the state.
The reasonable uses include:
- Whether the restriction is reasonably necessary to protect the employer’s business, unreasonably restrictive (time and space), and prejudicial to the public interest.
Exceptions to non-compete agreements in Iowa include:
- Healthcare employment agency workers
Iowa law does not state a specific allowable duration for a non-compete agreement. However, Iowa courts have generally found that agreements between one to three years in duration are within reason and are enforceable. Contracts that are longer than three years could be struck down and ruled to be unenforceable.
Again, Iowa law does not specifically state geographic limitation rules on non-compete agreements. However, Iowa courts have ruled that broad contracts with large geographic limitations are not enforceable.
Contracts that prevent future employment in a large land area, like the entire state, may not be enforceable if challenged. It’s advisable to limit geographic clauses to be as narrow as possible. It may be wiser to focus on client and customer relationships rather than making an agreement that covers a specific territory.
Download an Iowa non-compete agreement template here in PDF or Word format: