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Posts published in “Day: March 17, 2007”

Protection of some interests

It has been a few years, but we have in the past signed non-compete agreements, one employment-based preliminary to a short stint in television news, one of the places where such contracts are commmonplace. So we were a bit confused at first by the sudden emergence and somewhat surprising Senate floor defeat (narrowly, 16-18) of Senate Bill 1203, which on its face provides a specific state policy supporting the use of such contracts.

The catch is that non-competes are and have been enforceable as contracts; the headlines about the bill providing for their enforceability seemed a little off-kilter. What exactly did this bill do that caused such concern?

File this under one of those cases where a little research into the law helps with clarity.

As a core matter, non-competes are clearly a reasonable device in some business environments. In television news, for example, a station may spent a great deal of money and other effort promoting some of its on-air personnel, a real investment in that employee. If the employee walked out from station A one day and turned up that evening on station B, there's no question station A would have been damaged; you could almost consider that its investment was stolen. (We wouldn't go quite that far but we would understand the principle.) And in a variety of other businesses, comparable cases could be fairly developed.

But there are limits. To say that a person leaving an employer cannot practice his profession for an unduly long time, for example, is simply punitive - it turns the employee into a reasonably-paid indentured servant.

Like most other states, Idaho long has allowed legally for non-competes; also like many other states, the courts have been moving toward balancing the interests of employers and employees in deciding the validity of non-competes. The core purpose of 1203, which was proposed by the Idaho Association of Commerce & Industry, is to end that balance and swing the weight down solidly on the employers' side.

To read SB 1203 reasonably, you need to look back at a 2001 Idaho Supreme Court case.