A “restrictive covenant” in Iowa (more commonly referred to as a “non-compete”) is usually used to protect a company’s specific proprietary information and prevent unfair competition by preventing an employee from taking a position with a competing company in a defined geographic area or sector for a set period of time.
While non-compete agreements were once limited to only the most prestigious positions (usually the senior executive level), these agreements have become much more common for non-executives and blue collar workers in recent years. Today, it’s not uncommon for an entry-level position to require acceptance of a non-compete agreement as a condition of employment.
As an employee in Iowa, it is vital to understand that you have rights, and an experienced employment lawyer can help you understand your non-compete agreement and protect your ability to advance in your career and support yourself and your loved ones. At the Higgins Law Firm, PLLC, we believe in empowering employees, and we’ll be here to discuss your rights, whether your employer has asked you to sign a non-compete and you want to know if it is acceptable, or if you’ve left your position and the non-compete you signed is unreasonable.
We fight for the rights of employees, never employers. Contact Attorney Stuart Higgins and his team at (515) 619-9148 to schedule a confidential consultation with us today.
As the Supreme Court of Iowa stated in Baker v. Starkey, 259 Iowa 480, 144 N. W.2d 889 (1966), an employer has no right, barring contractual provisions, “to unnecessarily interfere with the employee following any trade or calling for which he is fitted and from which he may earn his livelihood and he cannot be precluded from exercising the skill and general knowledge he has acquired or increased through experience or even instructions while in the employment.”
It is another Supreme Court of Iowa case, Lamp v. American Prosthetics, Inc., 379 N.W.2d 909, 91 1 (Iowa 1986), that instructs courts to apply the following three-pronged test when determining to enforce a restrictive covenant:
(1) Is the restriction reasonably necessary for the protection of the employer’s business?
(2) Is it unreasonably restrictive of the employee’s rights?
(3) Is it prejudicial to the public interest?
In general, the state of Iowa has found that non-compete agreements are enforceable as long as they meet the criteria above and are not too broadly written that they will not hold up in court. This means that employees who feel that the terms of their non-compete agreement is too restrictive or are worried that they will possibly be in violation of a restrictive covenant should immediately contact a knowledgeable employment lawyer to discuss their concerns.
There are a number of things you should take into consideration when you are asked to sign a non-compete agreement. After determining that its scope is reasonable, you will want to be sure the terms do not restrict your future livelihood. Does it specify competitors or are the restrictions too broad? Clarify the information that you will be expected to protect. You may be able to narrow the terms of your non-compete agreement to a more specific product or field instead of having an agreement that broadly applies to a subject that might impose too many restrictions later on.
No. A non-solicitation clause relates to your agreement not to poach employees from your employer. With a non-solicitation clause, you cannot quit the job and attempt to get your co-workers to join you at a new company.
This will depend on the specifics of your non-compete agreement. It could be possible that your new business would be a form of direct competition that does violate a non-compete agreement, but other agreements may only have limitations on you accepting employment with a competitor rather than becoming one. You will certainly want to discuss your possible business launch with an attorney to review what would be allowed under your non-compete agreement.
The best way to avoid violating a non-compete agreement is to be proactive. If you have been offered a position and your employer asks you to sign a non-compete, contact an experienced Iowa employment attorney to review the agreement before you sign it. Do not worry about how this will look to your prospective employer; it is always safer to carefully consider any legally binding agreement before signing it. It could save you from having to fight a costly legal battle later on.
If you have left your position and wish to take a job that might be restricted by your non-compete agreement, you should again consult with a knowledgeable attorney to discuss your options. You could obtain an accommodation from your former employer, or your attorney could help you get the agreement modified by a court.
Employers in Iowa take non-compete agreements seriously, and you don’t want to risk violating one. Fortunately, an experienced employment lawyer can help you if your agreement is too restrictive, is selectively reinforced, or otherwise unfairly prevents you from working to support yourself and your loved ones.
Attorney Stuart Higgins and his team at Higgins Law Firm, PLLC have been representing employees all over Iowa since 2011. We have the knowledge, resources, and skills to help you with any restrictive covenant matter, so call us at (515) 619-9148 or contact us online to set up a free consultation.