Noncompete agreements in Idaho: how it started and how it’s going

From time to time in this newsletter, we have addressed how courts in Idaho view noncompete agreements. Given new case law, we believe it’s time for a refresher to update your understanding and remind you of issues to keep in mind when reviewing your noncompete agreements.

APLBI

In July 2008, and in response to a trend by Idaho courts to limit the enforceability of noncompete agreements, the Idaho Legislature enacted Title 44, Chapter 27 of the Idaho Code entitled “Agreements and Covenants Protecting Legitimate Business Interests” (APLBI). APLBI set forth presumptions for enforceable noncompete agreements and reduced the burdens on employers that are forced to file lawsuits to enforce noncompete agreements.

As we wrote in 2014 (see “Noncompete agreements: Is yours enforceable?” in the December 2014 issue):

Under the APLBI, Idaho employers may use noncompete agreements to protect their “legitimate business interests” by precluding “key” employees (or independent contractors) from engaging in employment that is in “direct competition with the employer’s business after termination of employment.” The APLBI provides definitions for “key” employees and “legitimate business interests.” Noncompete agreements also must be reasonable in duration, geographical area, and type of employment they cover. In other words, a noncompete agreement must not impose a greater restraint than is reasonably necessary to protect an employer’s business interests.