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In Iowa, a non-compete agreement, also known as a restrictive covenant agreement, is a way for businesses and companies to use restrictive covenants to protect their trade secrets and business interests. Companies receive a promise from their employees that they will not divulge sensitive trade secrets or company information to competitors to create unfair competition. Non-competition agreements are legally enforceable and prevent a former employee from sharing sensitive information by possibly exposing them to fines, reparations, and other potential remedies awarded to the employer's business by Iowa courts.
Before creating a non-compete agreement to protect your confidential information from a competing business, you should seek legal advice from a law firm that practices employment law. They can review the document to ensure that it does cover your legitimate interests and determine its enforceability in the event that you need to sue your former employee. They can also help you draft an employment contract that ensures that, in addition to your legitimate interests, the employee's rights are also protected in accordance with Iowa law.
The State of Iowa doesn’t have any laws that specifically regulate non-compete agreements. However, an Iowa case that went to the Iowa Supreme Court did establish a three-prong test to determine whether a non-compete agreement may be used or if the partial enforcement doctrine should be used to modify agreement:
A non-compete agreement can be used to protect goodwill, trade secrets, the employer's customers, and even specialized training. To learn more about non-compete agreements, their use, and their enforceability, business owners should talk with an employment lawyer.
Protect your Iowa business by also using an Iowa non-disclosure agreement form. Download an Iowa non-disclosure agreement form now!
To write an Iowa non-compete agreement, include the following clauses:
Both parties must sign and print their names. The signatures should be dated. Each party should receive a copy of the finalized agreement for their records.
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