Bill description: SB 1287 would eliminate a provision in Idaho’s non-compete laws which allows businesses to force any key employee in violation of their contract to terminate their employment with a new employer.
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
In 2016, the Idaho Legislature passed and the governor signed into law HB 487, which adjusted Idaho’s non-compete laws to determine when irreparable harm has been done by the breach of a non-compete contract. SB 1287 would eliminate the language that was added through HB 487.
The language that was added in 2016 states that if any “key employee or key independent contractor is in breach of an agreement or a covenant, a rebuttable presumption of irreparable harm has been established.” This orders the court to order the employee to quit working at their new business unless they can prove that no harm has been done. This is contrary to general contract law, where an employee breaching a non-compete agreement must pay what was agreed to in their contract, and if their former employer wishes to prevent them from working at their new business, the employer must prove to the court that they are causing irreparable harm.
By repealing the language which states that any key employee who breaches their non-compete contract causes irreparable harm to their former employer, SB 1287 would allow judicial discretion in such contract cases, would allow individuals more choice, and would take the mandates of the Legislature out of this aspect of contract law.
This analysis reflects the bill as amended on 2/28.
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