Under Idaho`s 2008 Code 44-2701 and Regulations, companies may enter into competition bans with “key workers” and “significant independent contractors” to protect a legitimate business interest, provided restrictions on the duration, geographic area and nature of employment are appropriate. To qualify as a “key” employee or an independent contractor, the statute requires proof that the nature of its position is capable of “undermining or threatening the legitimate business interests of an employer.” The law also contains an inclusive list of “legitimate business interests,” including corporate value, customer relations, referral relationships, supplier relations, confidential information and trade secrets. Contrary to the obvious statutory mandate to amend or limit unreasonable provisions of such agreements, the Archibald court rejected any amendment to the agreement, appearing to limit the scope of the provisions of the statute. The court justified this decision by the fact that the law “does not require the court to insert conditions into a non-competition agreement in order to make them reasonable when such conditions are absent because of the provision” [xxvii] – a justification very similar to the old rule in Pinnacle Performance, Inc. against Hessing. [xxviii] Suffice it to say that if you are introduced and invited by a non-compete agreement that limits your future ability to work in a particular sector for a certain period of time and in a given geographic area, you should discuss with a lawyer the consequences of signing such an agreement. If you are an employer who wants to protect your legitimate business interests, there are opportunities to enter into competition bans that can do so without unfairly and illegally restricting your employees` future employment opportunities. Employers should keep these issues in mind when asking workers to sign restrictive agreements. It is also important to know whether potential new recruits have a non-compete agreement with a former employer.
In some cases, the new employer may be held liable to the former employer if the worker`s hiring was contrary to the agreement. Different rules may apply to situations in which a business is sold in whole or in part and where the buyer and seller are entitled to a restrictive agreement.