Idaho went too far on noncompetition agreements

Print Article

The Legislature put the shoe on the wrong foot in 2016 when it passed a bill requiring employees to prove they did not harm their former employer if they violated a noncompetition agreement. The new law presumes irreparable harm to the employer, unless the employee can present proof to the contrary. The law is unfair, unnecessary and should be repealed.

During my private law practice before going onto the Idaho Supreme Court, I wrote a number of employment contracts with noncompete clauses and litigated on both sides of the issue. In 12 years on the Court, I authored a number of opinions on noncompetes and was probably more favorable to employers than most of my colleagues. I grew up believing people should keep their word and honor their contractual commitments.

While I routinely ruled that people should live with their contractual undertakings, noncompete provisions were a slightly different animal. They were often foisted on the employee on a take-it-or-leave-it basis in contracts where the employee had very few rights. Courts around the country have taken a jaundiced view of such contracts and Idaho has moved in that direction.

When I broke my wrist in 2002, I had a great physical therapist. About six months after my treatment ended, he called with noncompete troubles. He had taken a job with a local hospital and would be caring for its patients. His former employer headquartered in Texas was threatening a suit for violation of his noncompete, which he did not recall seeing in the contract. The threat against him was outrageous because there was no way he would be competing for patients of the former employer. This was not an uncommon situation.

Where the seller of a business agrees not to compete against the person buying the business, the buyer should be protected against a breach of the noncompete. In the regular employment setting, if the employer pays the employee extra for entering into a noncompete, or invests in specialized training for the employee, or gives the employee access to private business secrets, there are grounds for protection of the employer. If those elements are not present and the employer just wants to keep the employee chained to his or her job, protection may not be warranted.

In normal contract cases, a person suing for breach must prove all of the elements--that there was a contract, that the defendant violated it, that the plaintiff was damaged and the amount of damages. The 2016 bill removed the third element for noncompetes, requiring a former employee to prove the employer was not damaged. I am not aware of any reason why noncompete clauses should be treated differently than any other contractual provision.

During my private practice, I sometimes brought suit to enforce noncompete clauses. Just like any other contract case, if an employer has a good case it can win. If not, it shouldn’t. Noncompete cases do not warrant special rules. Noncompetes can serve valid interests, but they can also be used to unnecessarily stifle competition, to keep talented people from advancing, or to squelch the innovative employee who wants to strike out on his or her own. The pre-2016 legal landscape was properly balanced. That balance should be restored by repeal of the 2016 legislation.

•••

Jim Jones is former Chief Justice of the Idaho Supreme Court.

Print Article

Read More My Turn

Before you judge addicts, read this

September 14, 2018 at 5:00 am | Coeur d'Alene Press I’ve been an alcohol/drug counselor for the past 18 years. Recently, I’ve become concerned about the lack of understanding expressed in letters to the editor regarding addiction and addicts. First...

Comments

Read More

OPINION: KAREN BILOWITH — It’s the fund that keeps on giving

September 14, 2018 at 5:00 am | Coeur d'Alene Press In 2000, the estate of Gladys Langroise created a $15 million Donor Advised Fund in the Idaho Community Foundation. Mrs. Langroise was a well-educated philanthropist with a big heart. She had a parti...

Comments

Read More

OPINION: CHUCK MALLOY — Slot machines won’t save racing, foes say

September 12, 2018 at 5:00 am | Coeur d'Alene Press Second of two parts. The first part was published Sept. 5. If it looks like a slot machine, pays off like a slot machine and eats money like a slot machine, then it must be… A duck. Or, as prop...

Comments

Read More

Flag planting an important part of moon landing

September 06, 2018 at 5:00 am | Coeur d'Alene Press “I think (the Moon Landing) was widely regarded in the end as a human achievement and that’s how we chose to view it” says everyone who isn’t an American. Landing men on the moon was an American ach...

Comments

Read More

Contact Us

(208) 664-8176
215 N. Second St
Coeur d'Alene, Idaho 83814

©2018 The Coeur d'Alene Press Terms of Use Privacy Policy
X
X