Idaho Noncompete Reform: Senate Passes Bill

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Wikimedia Commons

Updated (updates in italic)

On March 22, 2016, the Idaho Senate voted 22-13 to pass a bill (H487) to modify Idaho noncompete law. (This follows the March 14 vote by the House to pass the bill 40-27-3.) On March 25, the bill was delivered to the governor.

The bill would amend Idaho noncompete law by limiting noncompetes to 18 months, where the only consideration is employment or continued employment. It would also create several rebuttable presumptions: (1) a duration of 18 months or shorter is reasonable; (2) a geographic area that “is restricted to the geographic areas in which the key employee or key independent contractor provided services or had a significant presence or influence” is reasonable; (3) if the scope of the restriction is limited to “the type of employment or line of business conducted by the key employee or key independent contractor while working for the employer” it is reasonable; (4) an employee who is “among the highest paid five percent (5%) of the employer’s employees or independent contractors is a ‘key employee’ or a ‘key independent contractor’” is reasonable; and (5) an employee who is in breach is causing irreparable harm to the employer. The latter two presumptions are rebuttable only if the “employee or independent contractor . . . show[s] that it has no ability to adversely affect the employer’s legitimate business interests.”

Idaho, following Utah, may be the second state this year to change its noncompete laws.

Thank you to Betsy Russell for calling this out.

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