NON-COMPETITION AGREEMENTS IN IDAHO

When an employer hires a new employee, it is often customary to require an important or key employee to sign a non-competition clause. These clauses take many forms, but they are generally designed to prevent the employee from leaving the firm and starting a competing firm, and utilizing the skills and knowledge which the employee obtained at the first firm.

In 2016, the Idaho legislature passed law which allowed reaffirmed the right of an employer to sue the employee if the employee’s new business caused irreparable harm to the business of the prior employer. In fact, the law stated that, in the lawsuit, the key employee had the burden of proof of showing that his or her new business was not harming the business of the former employer. In other words, if the employer sued the ex-employee, the ex-employee had the legal burden in trial to prove that his new business was not harming the prior employer’s business.

This law was quite a radical change, because normally it is the party bringing the lawsuit (the Plaintiff) who has the burden of proof at trial.

In 2017, the legislature reversed itself and removed this burden-shifting language. So we are back to where we were before. If the prior employer files suit, he has the burden of proving to a judge or jury that the new business started by the ex-employee is harming his business.

However, keep in mind that nothing has changed the essential content of the law; namely, that non-competition agreements are still VALID and ENFORCEABLE in Kootenai County and elsewhere in Idaho.  Therefore, think very carefully before signing such an agreement when taking a new job.