The Iowa non-compete agreement, also known as a covenant not to compete, is a legal agreement between two (2) parties; an employer and their employee. In the contract, the employee agrees not to compete against the employer’s business for the duration of their employment and a specified period of time afterward. The non-solicitation clause is an additional term of the contract that prohibits the employee from hiring or doing business with company employees or clients for the duration of the agreement. Although Iowa doesn’t have any set restrictions on non-compete agreements, in the eyes of the law, the agreement must reasonably protect the employer’s trade secrets and business while not infringing on the employee’s rights or the public interest.
Laws – No statute. However, the Supreme Court of Iowa does use a three (3) factor test to determine the validity of a non-compete agreement. To be enforceable, the agreement must meet the following criteria:
- Necessary for the protection of the employer’s business.
- Not unreasonably restrictive of the employee’s rights.
- Not prejudicial to the public interest.
Non-Compete Limit – No statutorily defined limit
Non-Solicitation Limit – No statutorily defined limit