USA – IDAHO Trends and Developments Contributed by: Tyler Anderson, Carsten Peterson, Tracy Wright and Christian Moak, Hawley Troxell
Non-Compete and Non-Solicitation Agreements in Idaho In 2024, the Federal Trade Commission (FTC) issued a nationwide rule that banned non-compete agree - ments. The rule was challenged and was blocked by federal courts later in 2024. In January 2026, the FTC clarified that it would no longer pursue a categorical national ban on non-competes and officially removed the rule from the Code of Federal Regulations. Since the nationwide ban is officially dead, non-compete agreements are governed entirely by state laws. Some states such as California, North Dakota and Minne - sota have outright bans on employment non-com - petes. Other states, such as Colorado, Oregon and Washington (which has enacted a law for a near-total ban that becomes effective 30 June 2027 and that will also be retroactive to existing agreements), ban non-competes for workers earning below a certain state-mandated compensation level. In Idaho, restrictive covenants, such as non-competes and non-solicitation, generally are enforceable but are “disfavoured” and must be “narrowly tailored” under Idaho law. See Pinehaven Planning Bd v Brooks , 138 Idaho 826, 831, 70 P3d 664, 669 (2002). A majority of the Idaho case authorities addressing restrictive cov - enants have dealt with them in the context of employ - ment agreements. Historically, courts have balanced an employer’s legitimate business interests and an individual’s right and ability to pursue gainful employ - ment. Restrictive covenants must be reasonable in scope and cannot be broader than necessary to pro - tect the employer’s legitimate business interests. See also Idaho Code (IC) Section 44-2701. Idaho statutes also govern non-compete agreements. See IC Section 44-2704; this statute provides “rebut - table presumptions” that favour the enforceability of non-compete agreements involving “key employees” and “key independent contractors”. A “key employ - ee” is one that is among the highest-paid 5% of the employer’s workforce. To rebut this presumption, the employee must show that they lack the ability to adversely affect the employer’s legitimate business interests, such as customer relationships, confidential information, goodwill or trade secrets. For example, an employee that lacks information or knowledge about the practice, trade secrets or marketing of a business
is likely not to be a key employee. In practical terms, courts are more likely to find a manager or an execu - tive as a key employee but not a “regular” employee. Further, a non-compete lasting no longer than 18 months after termination is presumed reasonable as to duration. Restrictions longer than 18 months gen - erally require additional consideration beyond mere employment or continued employment. Further, a non-compete is reasonable as to geographic area if it is restricted to areas where the employee pro - vided services or had a significant presence or influ - ence on behalf of the employer. This means that there should be a specific mileage radius boundary from the employer’s business for the new employment, or other geographic limitation. Nationwide prohibitions are not likely to be enforced, even if an employee does business throughout the country. Similarly, a restric - tion is presumed reasonable if it limits the employee only from engaging in the same type of employment or line of business that the employer performed while working for the employer. The Idaho Supreme Court has not directly interpreted the rebuttable presumptions in IC Section 44-2704. However, it is clear that courts must analyse the Idaho statutes. See Blaskiewicz v Spine Institute of Idaho , PA , 171 Idaho 201, 519 P3d 1141 (2022). In Blask- iewicz , the lower court had only analysed the case under prior decisions governing non-compete agree - ments in granting summary judgment to the employee, finding a non-compete agreement unenforceable. The Supreme Court concluded it was “clear error” for the lower court to not address the statutes. The Court in Blaskiewicz concluded that there were genuine issues of material fact as to whether the non-compete agree - ment was void as a matter of public policy or other - wise enforceable. No Idaho appellate court to date has issued an opin - ion explaining or detailing what evidence is sufficient to rebut the presumptions of enforceability. There - fore, it is a factual enquiry for a court to decide on in evaluating the evidence. What is clear, however, is that a non-compete agreement should meet the rebuttal presumptions if it is to be enforceable. The statutes also allow a court to “blue-pencil” a non- compete agreement; that is, if a restrictive covenant
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