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Eye On Boise

100+ Idaho business leaders urge repeal of controversial 2016 non-compete law

More than 100 Idaho business leaders, ranging from high-tech CEOs to small-business owners to engineers, marketers and manufacturers, have signed a letter to Gov. Butch Otter and the Idaho Legislature calling for the repeal of a 2016 non-compete law that sharply limits the rights of employees who move to new firms.

The law, which passed both houses by divided votes amid much controversy, took effect July 1, 2016. Since then, Idaho’s drawn a slew of negative national publicity over the law, from a New York Times headline that proclaimed, “Quit your job for a better one? Not if you live in Idaho,” to an article headlined, “Have a great startup idea? Don’t move to Idaho.”

House Assistant Minority Leader Ilana Rubel, D-Boise, an attorney who vehemently opposed the bill, is leading the call for its repeal. “As amended, the statute requires Idaho courts to find that employers who hold non-compete agreements suffer ‘irreparable harm’ when an employee takes a job with a competitor, regardless of whether any actual harm occurs,” Rubel said. “Any law that stifles business growth and encourages entrepreneurs to leave the state is not good for Idaho. It also hurts families because workers don’t have the freedom to find a better, high-paying job for fear of getting sued. No one should have to endure a lawsuit in order to start a business or take a better job. That’s simply anti-growth.”

The business leaders’ letter says, “We, the undersigned, represent a wide range of business interests in the great state of Idaho. We are extremely concerned about the growth of not only our own businesses, but of Idaho’s economy generally. We want to see Idaho take its place as a hub of technology and other knowledge-based industries, and we are concerned that Idaho’s laws are not currently fully supportive of that goal.”

Among those signing the letter are Ward and Joe Parkinson, the co-founders of Micron Technology; Jamie Cooper, CEO and president of Drake Cooper; Michelle Crosby, founder and CEO of Wevorce; Ken Edmunds, owner of the Edmunds Group and former state labor director; Milt Gillespie, president of Mariposa Labs; Todd Hunter, owner of Idaho Lumber; Bob Lokken, founder of WhiteCloud Analytics; Paul Price, CEO of Balihoo; and Jeff Roth, owner of Hailey Dental Studio. You can see the full list here.

“We need a fair path for workers to leave a job and launch new businesses for Idaho’s economy to thrive,” the business leaders wrote in their letter. “We need investors to have confidence that they can invest in start-up companies without facing costly lawsuits in which the deck is stacked against them. The risk created by HB 487, when added to the usual uncertainties facing any new venture, makes investment in start-up companies in Idaho a much less attractive proposition.”

Jon Hanian, press secretary for Otter, said the governor hasn’t yet seen the letter. “Once we get it, we’ll review it and obviously we’ll read through it and see what they have to say and then go from there,” he said.

The 2016 bill was proposed by Rep. Patrick McDonald, R-Boise, and was supported by the Idaho Association of Commerce and Industry and Codi Galloway, a business owner who was embroiled in a pending lawsuit against a former employee of her business, LeapFox Learning, who she said stole customer lists despite a non-compete agreement. The bill squeaked through the Senate Commerce Committee by just one vote at the panel’s final meeting of the year, after lawyers on both sides argued vehemently for and against the bill and an Idaho Attorney General’s opinion pointed out problems with how it was worded.

A lobbyist for Micron, Jayson Ronk, spoke briefly in support of the bill at the 2016 committee hearing, saying the company’s legal team had reviewed the bill and believed it would benefit employers, and that Micron signed few non-compete agreements.

Otter signed the bill into law without comment on March 30, 2016.

Betsy Z. Russell
Betsy Z. Russell joined The Spokesman-Review in 1991. She currently is a reporter in the Boise Bureau covering Idaho state government and politics, and other news from Idaho's state capital.

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