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A covenant not to compete will be deemed valid if it only restricts the employee's opportunity to compete while they remain employed with the employer requiring the covenant, but imposes no restrictions on the employee once they separate from the employment.
Courts consider several elements when determining the reasonableness of a covenant not to compete, including (1) the time and territory encompassed by the covenant, (2) the territory in which the employee worked, (3) the area in which the employer operated, (4) the nature of the business and (5) the nature of the
Texas courts have recognized three main categories of acceptable consideration: (1) tying the non-compete to a confidentiality agreement; (2) an employer's agreement to provide specialized training; and (3) an award of stock options. Stock Option Award.
It is possible to find non-compete loopholes in certain circumstances in order to void a non-compete contract. For instance, if you can prove that you never signed the contract, or if you can demonstrate that the contract is against the public interest, you may be able to void the agreement.
Interestingly, although a non-compete cannot prohibit direct competition for longer than eighteen months after the employment ends, if the non-compete's prohibitions last for only eighteen months or less, the non-compete is presumed under Idaho law to be reasonable and enforceable.
Assuming an employee meets the definition of a key employee, an Idaho court will enforce a non-compete obligation as long as it is reasonable in terms of duration, geographic scope, and scope of restricted activities.
The well-known general rule is that a covenant not to compete is only enforceable if its terms are reasonable and necessary to protect the legitimate business interests of the employer.
A covenant not to compete has three elements: (1) a limitation on the work that may be pursued by the employee, (2) a definite time, and (3) a definite geographical area. The time and geographical restrictions are usually straightforward; the limitation on work is a little more complex.
Idaho law states that if a non-compete is unreasonable in any respect, a court must modify the agreement to reflect the intent of the parties and render the agreement reasonable and enforceable.