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Employee Restrictive Covenant Agreement

Cover Terms

The terms below are incorporated into and form part of this agreement.

Employer[Legal name of the entity that employs the employee]
Employee[Full legal name of the employee]
Employee Title / Position
Effective Date[Effective date of this agreement — the date the last party signs. It anchors the duration presumptions stated in Cover Terms.]
Governing LawIdaho
Healthcare Provider[Whether Employee is a healthcare provider whose covenant implicates profession-specific restrictions, patient access, or continuity-of-care requirements. Set this explicitly from Employee's licensed role; do not infer it from the agreement's jurisdiction.]
Confidentiality
Trade Secrets DurationPerpetual
Other Confidential Information Duration24 months
Employee Non-Solicitation
Duration24 months
Market benchmark (based on 76 companies)HideShow
TermFrequency
12 months44.7%
Selected default24 months34.9%
18 months11.2%
Why this selected default?

Why is this the selected default?

24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. The Act sets no express duration presumption for the no-hire category, so the uniquely-essential scope limit does the primary category work; counsel should size the term to the workforce interest actually protected.

Covered Employee Lookback12 months
Customer Non-Solicitation
Duration12 months
State-law basis 12 months

Reference only — not part of this agreement.

12 months sits well inside the presumptively reasonable window for a current-customer non-solicit: eighteen months, or for as long as post-separation consideration is paid, whichever is greater. Counsel may extend toward eighteen months, or longer while post-separation consideration is paid, where the interest supports it.

Covered Customer Lookback12 months
No Business with Covered Customers
Duration12 months
State-law basis 12 months

Reference only — not part of this agreement.

12 months sits within the current-customer window. Because non-dealing has no category of its own, it is drawn to fit inside the current-customer non-solicit exception, and its duration tracks that category's presumption.

Non-Investment
Duration12 months
Non-Disparagement
Duration24 months
Consideration
Consideration for Restrictive CovenantsEmployee's employment or continued employment with Employer, which the parties agree is sufficient consideration for a direct-competition restriction of eighteen months or less; if any direct-competition restriction runs longer than eighteen months, the additional consideration described in this agreement
State-law basis Employee's employment or continued employment with Employer, which the parties agree is sufficient consideration for a direct-competition restriction of eighteen months or less; if any direct-competition restriction runs longer than eighteen months, the additional consideration described in this agreement

Reference only — not part of this agreement.

Idaho admits no circumstance in which a direct-competition restriction exceeds eighteen months absent consideration beyond employment, while continued at-will employment is sufficient inside the window. Counsel should replace this with the specific negotiated benefit whenever the term exceeds eighteen months.

Standard Terms

1. Defined Terms

“Competitive Business” means the business activities described in Cover Terms under Competitive Business, limited so far as possible to the type of employment or line of business Employee actually conducted for Employer.

“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee.

“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.

“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.

“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.

“Protected Interests” means Employer's goodwill, technologies, intellectual property, business plans, business processes and methods of operation, customers, customer lists, customer contacts and referral sources, vendors and vendor contacts, financial and marketing information, and trade secrets.

“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.

“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.

“Solicit” means an overt act initiated by Employee that entreats, implores, pleads, or petitions a person or entity for the business or relationship at issue, and seeks something in return. Solicit does not include the mere acceptance of business, ordinary communication between Employee and another person, responding to general advertisements, or responding to unsolicited inquiries not initiated by Employee.

“Trade Secrets” has the meaning given in the Idaho Trade Secrets Act, Idaho Code section 48-801.

Drafting Note Affirmative solicitation

Under Horn, solicitation requires an overt act seeking the customer's business, so a customer restriction built around affirmative solicitation stays inside the settled rule, while one that bars accepting unsolicited work reaches conduct Horn holds is not solicitation and functions as something broader . Idaho has not resolved whether a no-service or non-dealing restraint enforces as written, is analyzed as a direct-competition restraint under chapter 44-27 with the key-worker gate and eighteen-month cap, or fails, so a covenant confined to affirmative solicitation carries the least of that risk.

2. Recitals, Key-Worker Status, and Protected Interests

Employer and Employee acknowledge that each restrictive covenant in this agreement protects one or more of Employer's Protected Interests. Employee acknowledges that Employee holds a key role and has access to Employer's Protected Interests.

Drafting Note Key-worker evidence

Salary rank carries a covenant only so far: the highest-paid-five-percent presumption is rebuttable, and outside the top five percent it does not apply at all, so a covenant against a worker who is not demonstrably key holds only where the record shows the inside knowledge, public exposure, customer influence, or similar facts that make the worker key . A covenant resting on pay rank alone stands exposed where the worker rebuts the presumption or falls outside it.

Drafting Note Protected interest

A covenant enforces only so far as it protects a legitimate business interest and reaches no further than reasonably necessary, so a generic competition ban untied to a named interest is measured against nothing the employer can point to and is weaker than a covenant tied to the actual customer contacts, referral sources, confidential processes, technologies, or similar interests the worker can turn against the employer . A restraint pitched at ordinary competition rather than a named protectable interest is the one most exposed to the no-greater-restraint-than-necessary limit.

3. Timing, Consideration, and Right to Consult Counsel

Employer has advised Employee that Employee may consult with an attorney before entering into this agreement, and Employee confirms having entered this agreement knowingly and voluntarily. In consideration of Employee's employment or continued employment and Employee's employment or continued employment with Employer, which the parties agree is sufficient consideration for a direct-competition restriction of eighteen months or less; if any direct-competition restriction runs longer than eighteen months, the additional consideration described in this agreement, the parties agree to the terms of this agreement. Employee acknowledges that the restrictions in this agreement are reasonable and necessary to protect Employer's Protected Interests. This agreement is effective as of the Effective Date listed in Cover Terms.

4. Confidential Information and Trade Secret Protection

Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue for the Trade Secrets Duration in Cover Terms, which is intended to last as long as the information remains a trade secret. Employee's obligations regarding other Confidential Information continue for the Other Confidential Information Duration in Cover Terms.

Drafting Note Trade-secret separation

Trade-secret protection survives independently of chapter 44-27, so where the real risk is misuse of secret information an Idaho Trade Secrets Act claim, resting on actual or threatened misappropriation, is often better tailored than a broad work ban that must clear the key-worker gate and reasonableness limits . That protection depends on demonstrated secrecy efforts and misappropriation evidence, so confidentiality, trade-secret, and non-compete obligations kept on separate footing each stand or fall on their own terms rather than dragging one another down.

5. Permitted Disclosures and Protected Conduct

Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by the National Labor Relations Act and other applicable law; (d) testifying truthfully in legal proceedings; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.

6. Return, Deletion, and Certification of Company Property

Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request.

7. Non-Solicitation of Employees

During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees.

8. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners

During the Restricted Period, Employee must not Solicit the business of any Covered Customer. This covenant does not prohibit Employee from accepting business initiated by a Covered Customer or from engaging in ordinary communications with a Covered Customer.

9. No Business with Covered Customers

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact.

10. Non-Investment

During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. Passive Public Holdings are permitted.

11. Non-Disparagement

During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law, including protected concerted activity under the National Labor Relations Act.

12. Healthcare Provider and Patient Access

Where Employee is a healthcare provider, on Employee's departure the parties will cooperate in good faith on patient notification, continuity of care, and the orderly handling of patient relationships and records consistent with applicable law and professional obligations.

13. No Conflicting Obligations

Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any live restraint from a prior engagement and any potential conflict that arises during employment.

14. Notice to Future Employers and Other Third Parties

Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach an applicable covenant in this agreement. Employee consents to this disclosure.

15. Tolling During Breach

If Employee breaches any restrictive covenant in this agreement, the Restricted Period for that covenant is extended by one day for each day of the breach, so that the full duration of the restriction runs from the date the breach ends.

16. Remedies

Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law. Each party bears its own attorney fees and costs unless this agreement or applicable law provides otherwise.

17. Survival and Expiration of Each Covenant

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive to the extent they relate to trade secrets, for as long as the information remains a trade secret. All other provisions survive to the extent necessary to enforce rights that arose during employment.

Drafting Note Duration consideration

A direct-competition restraint longer than eighteen months falls outside the duration presumption and, absent consideration beyond employment or continued employment, section 44-2704 leaves the over-eighteen-month term vulnerable at the threshold . A term that runs past eighteen months on continued employment alone is the one section 44-2704(1) reaches first, so a restraint kept inside the window or backed by documented independent consideration is the one that holds.

18. Assignment and Successors

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.

19. Governing Law, Venue, and Dispute Process

This agreement is governed by the law of the Governing Law state listed in Cover Terms. Notwithstanding any other provision, nothing in this agreement requires Employee to litigate or arbitrate outside Idaho or otherwise restricts Employee from enforcing contract rights in Idaho tribunals. Disputes will be resolved in the courts of the State of Idaho, subject to non-waivable rights under applicable law.

Drafting Note Forum selection

Idaho Code § 29-110 voids a stipulation that keeps an Idaho party from enforcing contract rights in Idaho tribunals, and its arbitration carve-out does not protect out-of-state arbitration, so a foreign-law or out-of-state-forum clause does not reliably move an Idaho resident's restrictive-covenant dispute out of Idaho . Forum, arbitration location, and choice of law each turn on that policy separately, and a clause that ignores § 29-110 is the one an Idaho court sets aside.

20. Entire Agreement, Amendment, Waiver, and Electronic Signatures

This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject, except that it does not supersede any separate confidentiality, invention-assignment, or trade-secret agreement the parties intend to keep in force. This agreement may be amended only in writing signed by both parties; an amendment that would extend the direct-competition restriction past eighteen months requires consideration in addition to continued employment. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.

Signatures

By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.

Employer

Employer: [Legal name of the entity that employs the employee]

Signature:

Signatory Name: [Full name of the authorized signatory signing for the employer]

Title: [Title of the authorized signatory signing for the employer]

Date:

Employee

Signature:

Print Name: [Full legal name of the employee]

Date:

Adapted from OpenAgreements Wyoming and Florida restrictive covenant templates. Licensed under CC BY 4.0.