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Looking for business-friendly noncompete laws? Try Idaho

Courts across the country have been siding with employees lately when it comes to non-compete clauses, and New York is no exception. In 2016, the New York State Attorney General said, "Unless an individual has highly unique skills or access to trade secrets, non-compete clauses have no place in a worker's employment contract."

Defending non-compete agreements can be expensive for employers, and can lead to unfavorable results. On the other hand, companies sometimes find even unenforceable non-compete agreements to be effective at preventing workers from joining a competitor, since an employee and his or her prospective employer may be reluctant to enter into a legal battle with the worker's former employer. 

To be enforceable, a non-compete agreement must have three primary components:

  1. The employee must receive something of value, which is generally the job itself.
  2. It must protect legitimate interests of the employer, such as trade secrets.
  3. It must be reasonable in scope, geography and time.

When an employee challenges the enforceability of a non-compete agreement, courts often side with employees unless the company can show that the employee possessed a unique skill or acquired trade secrets that he or she will use with a competitor to the detriment of the company. Even then, courts often restrict the non-compete agreement to a narrow geographic area and a limited amount of time.

This logic follows public policy concerns on the subject, as it can be crippling to a person's livelihood if he or she is forced out of the job market for several years because of a non-compete agreement which may or may not have any impact on the business.

However, while most states are making it more difficult to enforce non-compete agreements, Idaho is moving in the opposite direction.

An underrated technology hub, the state is trying to attract more start-ups and large technology companies. Given the hyper-competitive nature of the industry, more relaxed non-compete laws are an enticing draw for employers concerned about losing talented employees.

The state's approach to the topic provides an interesting look into an issue that has a huge impact on both employers and employees.

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